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Senate File 2383 - ReprintedA Bill ForAn Act 1relating to state and local revenue and finance by
2modifying the individual and corporate income taxes, the
3franchise tax, tax credits, the moneys and credits tax,
4the sales and use taxes and local option sales tax, the
5hotel and motel excise tax, the automobile rental excise
6tax, the Iowa educational savings plan trust, and the
7disabilities expenses savings plan trust, providing for
8other properly related matters, making penalties applicable,
9and including immediate effective date and retroactive and
10other applicability provisions.
11BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2INCOME TAX CHANGES FOR TAX YEAR 2018
3 Section 1. EARNED INCOME TAX CREDIT FOR 2018.
4Notwithstanding the definition of “Internal Revenue Code”
5in section 422.3, for tax years beginning during the 2018
6calendar year, any reference to the term “Internal Revenue
7Code” in section 422.12B shall mean the Internal Revenue Code
8of 1954, prior to the date of its redesignation as the Internal
9Revenue Code of 1986 by the Tax Reform Act of 1986, or means
10the Internal Revenue Code of 1986 as amended and in effect on
11January 1, 2016, but shall not be construed to include any
12amendment to the Internal Revenue Code enacted after January 1,
132016, including any amendment with retroactive applicability
14or effectiveness.
15 Sec. 2. ACCOUNTING METHOD AND OTHER MISCELLANEOUS
16COUPLING PROVISIONS FOR TAX YEAR 2018. Notwithstanding any
17other provision of law to the contrary, amendments to the
18Internal Revenue Code enacted in Pub.L. No.115-97, §13102,
19§13221, §13504, §13541, §13543, §13611, and §13613, apply in
20calculating federal adjusted gross income or federal taxable
21income, as applicable, for state tax purposes for purposes of
22chapter 422 for tax years beginning during the 2018 calendar
23year to the extent those amendments affect the calculation of
24federal adjusted gross income or federal taxable income, as
25applicable, for federal tax purposes for tax years beginning
26during the 2018 calendar year.
27 Sec. 3. TEACHER EXPENSE DEDUCTION. Notwithstanding any
28other provision of law to the contrary, for tax years beginning
29during the 2018 calendar year, a taxpayer is allowed to take
30the deduction for certain expenses of elementary and secondary
31school teachers allowed under section 62(a)(2)(D) of the
32Internal Revenue Code, as amended by Pub.L. No.114-113,
33division Q, §104, in computing net income for state tax
34purposes.
35 Sec. 4. EFFECTIVE DATE. This division of this Act, being
-1-1deemed of immediate importance, takes effect upon enactment.
2 Sec. 5. RETROACTIVE APPLICABILITY. This division of this
3Act applies retroactively to January 1, 2018, for tax years
4beginning on or after that date, but before January 1, 2019.
5DIVISION II
6INCOME TAX AND FRANCHISE TAX CHANGES BEGINNING IN 2019
7 Sec. 6. Section 217.39, Code 2018, is amended to read as
8follows:
9217.39 Persecuted victims of World War II — reparations —
10heirs.
11Notwithstanding any other law of this state, payments paid
12to and income from lost property of a victim of persecution
13for racial, ethnic, or religious reasons by Nazi Germany or
14any other Axis regime or as an heir of such victim which is
15exempt from state income tax as provided described in section
16422.7, subsection 35, Code 2018, shall not be considered as
17income or an asset for determining the eligibility for state or
18local government benefit or entitlement programs. The proceeds
19are not subject to recoupment for the receipt of governmental
20benefits or entitlements, and liens, except liens for child
21support, are not enforceable against these sums for any reason.
22 Sec. 7. Section 422.3, subsection 5, Code 2018, is amended
23to read as follows:
245. “Internal Revenue Code” means the Internal Revenue Code
25of 1954, prior to the date of its redesignation as the Internal
26Revenue Code of 1986 by the Tax Reform Act of 1986, or means
27the Internal Revenue Code of 1986, as amended and in effect
28on January 1, 2015. This definition shall not be construed
29to include any amendment to the Internal Revenue Code enacted
30after the date specified in the preceding sentence, including
31any amendment with retroactive applicability or effectiveness.
32 Sec. 8. Section 422.4, subsection 1, paragraphs b and c,
33Code 2018, are amended to read as follows:
34b. “Cumulative inflation factor” means the product of the
35annual inflation factor for the 1988 2022 calendar year and
-2-1all annual inflation factors for subsequent calendar years
2as determined pursuant to this subsection. The cumulative
3inflation factor applies to all tax years beginning on or after
4January 1 of the calendar year for which the latest annual
5inflation factor has been determined.
6c. The annual inflation factor for the 1988 2022 calendar
7year is one hundred percent.
8 Sec. 9. Section 422.4, subsection 2, Code 2018, is amended
9by striking the subsection.
10 Sec. 10. Section 422.4, subsection 16, Code 2018, is amended
11to read as follows:
1216. The words “taxable income” mean the net income as
13defined in section 422.7 minus the deductions deduction allowed
14by section 422.9, if available, in the case of individuals;
15in the case of estates or trusts, the words “taxable income”
16mean the taxable income (without a deduction for personal
17exemption) as computed for federal income tax purposes under
18the Internal Revenue Code, but with the adjustments specified
19in section 422.7 plus the Iowa income tax deducted in computing
20the federal taxable income and minus federal income taxes as
21provided in section 422.9.
22 Sec. 11. Section 422.5, subsection 1, paragraphs a, b, c, d,
23and e, Code 2018, are amended by striking the paragraphs and
24inserting in lieu thereof the following:
25a. On all taxable income from zero through twelve thousand
26dollars in the case of a married couple filing jointly, or from
27zero to six thousand dollars in the case of all other persons,
28five percent.
29b. On all taxable income exceeding twelve thousand dollars
30but not exceeding thirty thousand dollars in the case of a
31married couple filing jointly, or exceeding six thousand
32dollars but not exceeding fifteen thousand dollars in the case
33of all other persons, five and one-quarter percent.
34c. On all taxable income exceeding thirty thousand dollars
35but not exceeding sixty thousand dollars in the case of a
-3-1married couple filing jointly, or exceeding fifteen thousand
2dollars but not exceeding thirty thousand dollars in the case
3of all other persons, five and one-half percent.
4d. On all taxable income exceeding sixty thousand dollars
5but not exceeding one hundred fifty thousand dollars in the
6case of a married couple filing jointly, or exceeding thirty
7thousand dollars but not exceeding seventy-five thousand
8dollars in the case of all other persons, six percent.
9e. On all taxable income exceeding one hundred fifty
10thousand dollars in the case of a married couple filing
11jointly, or exceeding seventy-five thousand dollars in the case
12of all other persons, the following:
13(1) Six and six-tenths percent for tax years beginning
14during the 2019 calendar year.
15(2) Six and one-half percent for tax years beginning during
16the 2020 calendar year.
17(3) Six and four-tenths percent for tax years beginning
18during the 2021 calendar year.
19(4) Six and three-tenths percent for tax years beginning on
20or after January 1, 2022.
21 Sec. 12. Section 422.5, subsection 1, paragraphs f, g, h,
22and i, Code 2018, are amended by striking the paragraphs.
23 Sec. 13. Section 422.5, subsection 1, paragraph j, Code
242018, is amended to read as follows:
25j. (1) The tax imposed upon the taxable income of a
26nonresident shall be computed by reducing the amount determined
27pursuant to paragraphs “a” through “i” “e” by the amounts of
28nonrefundable credits under this division and by multiplying
29this resulting amount by a fraction of which the nonresident’s
30net income allocated to Iowa, as determined in section
31422.8, subsection 2, paragraph “a”, is the numerator and the
32nonresident’s total net income computed under section 422.7 is
33the denominator. This provision also applies to individuals
34who are residents of Iowa for less than the entire tax year.
35(2) (a) The tax imposed upon the taxable income of a
-4-1resident shareholder in an S corporation or of an estate
2or trust with a situs in Iowa that is a shareholder in an S
3corporation, which S corporation has in effect for the tax
4year an election under subchapter S of the Internal Revenue
5Code and carries on business within and without the state,
6may be computed by reducing the amount determined pursuant to
7paragraphs “a” through “i” “e” by the amounts of nonrefundable
8credits under this division and by multiplying this resulting
9amount by a fraction of which the resident’s or estate’s
10or trust’s net income allocated to Iowa, as determined in
11section 422.8, subsection 2, paragraph “b”, is the numerator
12and the resident’s or estate’s or trust’s total net income
13computed under section 422.7 is the denominator. If a resident
14shareholder, or an estate or trust with a situs in Iowa
15that is a shareholder, has elected to take advantage of this
16subparagraph (2), and for the next tax year elects not to take
17advantage of this subparagraph, the resident or estate or
18trust shareholder shall not reelect to take advantage of this
19subparagraph for the three tax years immediately following the
20first tax year for which the shareholder elected not to take
21advantage of this subparagraph, unless the director consents to
22the reelection. This subparagraph also applies to individuals
23who are residents of Iowa for less than the entire tax year.
24(b) This subparagraph (2) shall not affect the amount of
25the taxpayer’s checkoffs under this division, the credits from
26tax provided under this division, and the allocation of these
27credits between spouses if the taxpayers filed separate returns
28or separately on combined returns.
29 Sec. 14. Section 422.5, subsection 2, Code 2018, is amended
30by striking the subsection.
31 Sec. 15. Section 422.5, subsections 3 and 3B, Code 2018, are
32amended to read as follows:
333. a. The tax shall not be imposed on a resident or
34nonresident whose net income, as defined in section 422.7, is
35thirteen thousand five hundred dollars or less in the case
-5-1of married persons filing jointly or filing separately on a
2combined return, heads of household, and surviving spouses or
3nine thousand dollars or less in the case of all other persons;
4but in the event that the payment of tax under this division
5would reduce the net income to less than thirteen thousand five
6hundred dollars or nine thousand dollars as applicable, then
7the tax shall be reduced to that amount which would result
8in allowing the taxpayer to retain a net income of thirteen
9thousand five hundred dollars or nine thousand dollars as
10applicable. The preceding sentence does not apply to estates
11or trusts. For the purpose of this subsection, the entire net
12income, including any part of the net income not allocated
13to Iowa, shall be taken into account. For purposes of this
14subsection, net income includes all amounts of pensions or
15other retirement income, except for military retirement pay
16excluded under section 422.7, subsection 31A, paragraph “a”,
17or section 422.7, subsection 31B, paragraph “a”, received from
18any source which is not taxable under this division as a result
19of the government pension exclusions in section 422.7, or any
20other state law. If the combined net income of a husband and
21wife exceeds thirteen thousand five hundred dollars, neither
22of them shall receive the benefit of this subsection, and it
23is immaterial whether they file a joint return or separate
24returns. However, if a husband and wife file separate returns
25and have a combined net income of thirteen thousand five
26hundred dollars or less, neither spouse shall receive the
27benefit of this paragraph, if one spouse has a net operating
28loss and elects to carry back or carry forward the loss as
29provided under the Internal Revenue Code or in section 422.9,
30subsection 3. A person who is claimed as a dependent by
31another person as defined in section 422.12 shall not receive
32the benefit of this subsection if the person claiming the
33dependent has net income exceeding thirteen thousand five
34hundred dollars or nine thousand dollars as applicable or the
35person claiming the dependent and the person’s spouse have
-6-1combined net income exceeding thirteen thousand five hundred
2dollars or nine thousand dollars as applicable.
3b. In lieu of the computation in subsection 1 or 2, or in
4paragraph “a” of this subsection, if the married persons’,
5 filing jointly or filing separately on a combined return,
6head of household’s, or surviving spouse’s net income exceeds
7thirteen thousand five hundred dollars, the regular tax imposed
8under this division shall be the lesser of the maximum state
9individual income tax rate for the tax year times the portion
10of the net income in excess of thirteen thousand five hundred
11dollars or the regular tax liability computed without regard
12to this sentence. Taxpayers electing to file separately shall
13compute the alternate tax described in this paragraph using the
14total net income of the husband and wife. The alternate tax
15described in this paragraph does not apply if one spouse elects
16to carry back or carry forward the loss as provided under the
17Internal Revenue Code or in section 422.9, subsection 3.
183B. a. The tax shall not be imposed on a resident or
19nonresident who is at least sixty-five years old on December
2031 of the tax year and whose net income, as defined in section
21422.7, is thirty-two thousand dollars or less in the case
22of married persons filing jointly or filing separately on a
23combined return, heads of household, and surviving spouses or
24twenty-four thousand dollars or less in the case of all other
25persons; but in the event that the payment of tax under this
26division would reduce the net income to less than thirty-two
27thousand dollars or twenty-four thousand dollars as applicable,
28then the tax shall be reduced to that amount which would result
29in allowing the taxpayer to retain a net income of thirty-two
30thousand dollars or twenty-four thousand dollars as applicable.
31The preceding sentence does not apply to estates or trusts.
32For the purpose of this subsection, the entire net income,
33including any part of the net income not allocated to Iowa,
34shall be taken into account. For purposes of this subsection,
35net income includes all amounts of pensions or other retirement
-7-1income, except for military retirement pay excluded under
2section 422.7, subsection 31A, paragraph “a”, or section 422.7,
3subsection 31B, paragraph “a”, received from any source which is
4not taxable under this division as a result of the government
5pension exclusions in section 422.7, or any other state law.
6If the combined net income of a husband and wife exceeds
7thirty-two thousand dollars, neither of them shall receive the
8benefit of this subsection, and it is immaterial whether they
9file a joint return or separate returns. However, if a husband
10and wife file separate returns and have a combined net income
11of thirty-two thousand dollars or less, neither spouse shall
12receive the benefit of this paragraph, if one spouse has a net
13operating loss and elects to carry back or carry forward the
14loss as provided under the Internal Revenue Code or in section
15422.9, subsection 3. A person who is claimed as a dependent by
16another person as defined in section 422.12 shall not receive
17the benefit of this subsection if the person claiming the
18dependent has net income exceeding thirty-two thousand dollars
19or twenty-four thousand dollars as applicable or the person
20claiming the dependent and the person’s spouse have combined
21net income exceeding thirty-two thousand dollars or twenty-four
22thousand dollars as applicable.
23b. In lieu of the computation in subsection 1, 2, or 3, if
24the married persons’, filing jointly or filing separately on
25a combined return, head of household’s, or surviving spouse’s
26net income exceeds thirty-two thousand dollars, the regular tax
27imposed under this division shall be the lesser of the maximum
28state individual income tax rate for the tax year times the
29portion of the net income in excess of thirty-two thousand
30dollars or the regular tax liability computed without regard
31to this sentence. Taxpayers electing to file separately shall
32compute the alternate tax described in this paragraph using the
33total net income of the husband and wife. The alternate tax
34described in this paragraph does not apply if one spouse elects
35to carry back or carry forward the loss as provided under the
-8-1Internal Revenue Code or in section 422.9, subsection 3.
2c. This subsection applies even though one spouse has not
3attained the age of sixty-five, if the other spouse is at least
4sixty-five at the end of the tax year.
5 Sec. 16. Section 422.5, subsection 6, Code 2018, is amended
6by striking the subsection and inserting in lieu thereof the
7following:
86. Upon determination of the latest cumulative inflation
9factor, the director shall reduce each tax rate in subsection
101, paragraphs “a” through “d”, and paragraph “e”, subparagraph
11(4), by the same percentage that the latest cumulative
12inflation factor exceeds one hundred percent, shall round off
13the resulting rate to the nearest one-hundredth of one percent,
14and shall incorporate the result into the income tax forms and
15instructions for each tax year.
16 Sec. 17. Section 422.7, unnumbered paragraph 1, Code 2018,
17is amended to read as follows:
18The term “net income” means the adjusted gross income before
19the net operating loss deduction taxable income as properly
20computed for federal income tax purposes under section 63 the
21Internal Revenue Code, with the following adjustments:
22 Sec. 18. Section 422.7, Code 2018, is amended by adding the
23following new subsections:
24 NEW SUBSECTION. 4. Add any federal net operating loss
25deduction carried over from a taxable year beginning prior to
26January 1, 2019.
27 NEW SUBSECTION. 6. a. For tax years beginning in the 2019
28calendar year, subtract the amount of federal income taxes
29paid during the tax year to the extent payment is for a tax
30year beginning prior to January 1, 2019, and add any federal
31income tax refunds received during the tax year to the extent
32the federal income tax was deducted for a tax year beginning
33prior to January 1, 2019. Where married persons who have filed
34a joint federal income tax return file separately for state tax
35purposes, such total shall be divided between them according
-9-1to the portion of the total paid by each. Federal income taxes
2paid for a tax year in which an Iowa return was not required to
3be filed shall not be subtracted.
4b. Notwithstanding any other provision of law to the
5contrary, amounts subtracted or added pursuant to this
6subsection shall not be included in the calculation of net
7income for purposes of section 422.5, subsection 3 or 3B, or
8section 422.13.
9 NEW SUBSECTION. 6A. Subtract, to the extent included,
10income from interest and earnings received from a burial trust
11fund as defined in section 523A.102.
12 Sec. 19. Section 422.7, subsection 12, paragraph a,
13unnumbered paragraph 1, Code 2018, is amended to read as
14follows:
15If For tax years beginning prior to January 1, 2022, if the
16adjusted gross federal taxable income includes income or loss
17from a small business operated by the taxpayer, an additional
18deduction shall be allowed in computing the income or loss from
19the small business if the small business hired for employment
20in the state during its annual accounting period ending with or
21during the taxpayer’s tax year any of the following:
22 Sec. 20. Section 422.7, subsection 12A, paragraph a,
23unnumbered paragraph 1, Code 2018, is amended to read as
24follows:
25If For tax years beginning prior to January 1, 2022, if the
26adjusted gross federal taxable income includes income or loss
27from a business operated by the taxpayer, and if the business
28does not qualify for the adjustment under subsection 12, an
29additional deduction shall be allowed in computing the income
30or loss from the business if the business hired for employment
31in the state during its annual accounting period ending with or
32during the taxpayer’s tax year either of the following:
33 Sec. 21. Section 422.7, subsection 13, Code 2018, is amended
34by striking the subsection and inserting in lieu thereof the
35following:
-10- 113. Subtract, to the extent included, the amount of social
2security benefits taxable under section 86 of the Internal
3Revenue Code.
4 Sec. 22. Section 422.7, Code 2018, is amended by adding the
5following new subsections:
6 NEW SUBSECTION. 18. Add, to the extent deducted for federal
7tax purposes, charitable contributions under section 170 of
8the Internal Revenue Code to the extent such contribution was
9made to an organization for the purpose of deposit in the Iowa
10education savings plan trust established in chapter 12D, and
11the taxpayer designated that any part of the contribution be
12used for the direct benefit of any dependent of the taxpayer or
13any other single beneficiary designated by the taxpayer.
14 NEW SUBSECTION. 19. a. Subtract, to the extent included,
15income resulting from the payment by an employer of the
16taxpayer, whether paid to the taxpayer or to a lender, of
17principal or interest on any qualified education loan incurred
18by the taxpayer.
19b. If the taxpayer has a deduction in computing federal
20taxable income under section 221 of the Internal Revenue Code
21for interest on a qualified education loan, the taxpayer shall
22recompute for purposes of this subsection the amount of the
23deduction under paragraph “a” by not subtracting any amount of
24income resulting from the employer’s payment of interest on a
25qualified education loan that was also deducted by the taxpayer
26under section 221 of the Internal Revenue Code.
27c. For purposes of this subsection, “qualified education
28loan” means the same as defined in section 221 of the Internal
29Revenue Code.
30 Sec. 23. Section 422.7, subsection 31, Code 2018, is amended
31to read as follows:
3231. a. For a person who is disabled, or is fifty-five
33years of age or older, or is the surviving spouse of an
34individual or a survivor having an insurable interest in an
35individual who would have qualified for the exemption under
-11-1this subsection for the tax year, subtract, to the extent
2included, the total amount of a governmental or other pension
3or retirement pay, including, but not limited to, defined
4benefit or defined contribution plans, annuities, individual
5retirement accounts, plans maintained or contributed to by an
6employer, or maintained or contributed to by a self-employed
7person as an employer, and deferred compensation plans or any
8earnings attributable to the deferred compensation plans, up
9to a maximum of six thousand dollars amount as specified in
10paragraph “b” for a person, other than a husband or wife, who
11files a separate state income tax return and up to a maximum
12of twelve thousand dollars amount as specified in paragraph
13“c” for a husband and wife who file a joint state income tax
14return. However, a surviving spouse who is not disabled or
15fifty-five years of age or older can only exclude the amount
16of pension or retirement pay received as a result of the death
17of the other spouse. A husband and wife filing separate state
18income tax returns or separately on a combined state return
19 are allowed a combined maximum exclusion under this subsection
20of up to twelve thousand dollars. The twelve thousand dollar
21 the maximum amount specified in paragraph “c”, which exclusion
22shall be allocated to the husband or wife in the proportion
23that each spouse’s respective pension and retirement pay
24received bears to total combined pension and retirement pay
25received.
26b. (1) For tax years beginning on or after January 1, 2019,
27but before January 1, 2022, the maximum exclusion amount equals
28ten thousand dollars.
29(2) For tax years beginning on or after January 1, 2022, the
30maximum exclusion amount equals twelve thousand dollars.
31c. (1) For tax years beginning on or after January 1, 2019,
32but before January 1, 2022, the maximum exclusion amount equals
33twenty thousand dollars.
34(2) For tax years beginning on or after January 1, 2022, the
35maximum exclusion amount equals twenty-four thousand dollars.
-12-1 Sec. 24. Section 422.7, subsection 41, Code 2018, is amended
2by adding the following new paragraph:
3 NEW PARAGRAPH. 0e. Add, to the extent deducted for
4federal tax purposes, interest, taxes, and other miscellaneous
5expenses to the extent such amounts are eligible home costs
6in connection with a qualified home purchase that were paid
7or reimbursed from funds in a first-time homebuyer savings
8account.
9 Sec. 25. Section 422.7, subsection 44, paragraph a,
10unnumbered paragraph 1, Code 2018, is amended to read as
11follows:
12If For tax years beginning before January 1, 2022, if the
13taxpayer, while living, donates one or more of the taxpayer’s
14human organs to another human being for immediate human organ
15transplantation during the tax year, subtract, to the extent
16not otherwise excluded, the following unreimbursed expenses
17incurred by the taxpayer and related to the taxpayer’s organ
18donation:
19 Sec. 26. Section 422.7, subsection 47, Code 2018, is amended
20to read as follows:
2147. Subtract, to the extent not otherwise deducted in
22computing adjusted gross federal taxable income, the amounts
23paid by the taxpayer to the department of veterans affairs for
24the purpose of providing grants under the injured veterans
25grant program established in section 35A.14. Amounts
26subtracted under this subsection shall not be used by the
27taxpayer in computing the amount of charitable contributions as
28defined by section 170 of the Internal Revenue Code.
29 Sec. 27. Section 422.7, Code 2018, is amended by adding the
30following new subsection:
31 NEW SUBSECTION. 51. The additional first-year depreciation
32allowance authorized in section 168(k) of the Internal Revenue
33Code does not apply in computing net income for state tax
34purposes. If the taxpayer has taken the additional first-year
35depreciation allowance for purposes of computing federal
-13-1taxable income, then the taxpayer shall make the following
2adjustments to federal taxable income when computing net income
3for state tax purposes:
4a. Add the total amount of depreciation taken under section
5168(k) of the Internal Revenue Code for the tax year.
6b. Subtract the amount of depreciation allowable under the
7modified accelerated cost recovery system described in section
8168 of the Internal Revenue Code and calculated without regard
9to section 168(k).
10c. Any other adjustments to gains or losses necessary to
11reflect the adjustments made in paragraphs “a” and “b”. The
12director shall adopt rules for the administration of this
13paragraph.
14 Sec. 28. Section 422.7, subsections 3, 7, 8, 9, 10, 11, 14,
1515, 16, 20, 21, 22, 23, 24, 25, 26, 29, 30, 35, 36, 37, 39, 39A,
1639B, 40, 43, 45, 49, 53, 55, 56, 57, and 58, Code 2018, are
17amended by striking the subsections.
18 Sec. 29. Section 422.8, subsection 4, Code 2018, is amended
19by striking the subsection.
20 Sec. 30. Section 422.9, Code 2018, is amended by striking
21the section and inserting in lieu thereof the following:
22422.9 Iowa net operating loss incurred prior to January 1,
232019.
24Any Iowa net operating loss carried over from a taxable year
25beginning prior to January 1, 2019, may be deducted as provided
26in section 422.9, subsection 3, Code 2018.
27 Sec. 31. Section 422.11S, subsection 4, Code 2018, is
28amended to read as follows:
294. Married taxpayers who file separate returns or file
30separately on a combined return form must determine the tax
31credit under subsection 1 based upon their combined net income
32and allocate the total credit amount to each spouse in the
33proportion that each spouse’s respective net income bears to
34the total combined net income. Nonresidents or part-year
35residents of Iowa must determine their tax credit in the ratio
-14-1of their Iowa source net income to their all source net income.
2Nonresidents or part-year residents who are married and elect
3to file separate returns or to file separately on a combined
4return form must allocate the tax credit between the spouses
5in the ratio of each spouse’s Iowa source net income to the
6combined Iowa source net income of the taxpayers.
7 Sec. 32. Section 422.12B, subsection 2, Code 2018, is
8amended to read as follows:
92. Married taxpayers electing to file separate returns or
10filing separately on a combined return may avail themselves
11of the earned income credit by allocating the earned income
12credit to each spouse in the proportion that each spouse’s
13respective earned income bears to the total combined earned
14income. Taxpayers affected by the allocation provisions of
15section 422.8 shall be permitted a deduction for the credit
16only in the amount fairly and equitably allocable to Iowa under
17rules prescribed by the director.
18 Sec. 33. Section 422.12C, subsection 4, Code 2018, is
19amended to read as follows:
204. Married taxpayers who have filed joint federal returns
21electing to file separate returns or to file separately on a
22combined return form must determine the child and dependent
23care credit under subsection 1 or the early childhood
24development tax credit under subsection 2 based upon their
25combined net income and allocate the total credit amount to
26each spouse in the proportion that each spouse’s respective net
27income bears to the total combined net income. Nonresidents
28or part-year residents of Iowa must determine their Iowa child
29and dependent care credit in the ratio of their Iowa source
30net income to their all source net income. Nonresidents or
31part-year residents who are married and elect to file separate
32returns or to file separately on a combined return form must
33allocate the Iowa child and dependent care credit between the
34spouses in the ratio of each spouse’s Iowa source net income to
35the combined Iowa source net income of the taxpayers.
-15-1 Sec. 34. Section 422.13, subsection 1, paragraph c, Code
22018, is amended by striking the paragraph.
3 Sec. 35. Section 422.16, subsection 1, paragraph f, Code
42018, is amended by striking the paragraph.
5 Sec. 36. Section 422.21, subsections 2, 5, and 7, Code 2018,
6are amended to read as follows:
72. An individual in the armed forces of the United States
8serving in an area designated by the president of the United
9States or the United States Congress as a combat zone or as a
10qualified hazardous duty area, or deployed outside the United
11States away from the individual’s permanent duty station while
12participating in an operation designated by the United States
13secretary of defense as a contingency operation as defined
14in 10 U.S.C. §101(a)(13), or which became such a contingency
15operation by the operation of law, or an individual serving in
16support of those forces, is allowed the same additional time
17period after leaving the combat zone or the qualified hazardous
18duty area, or ceasing to participate in such contingency
19operation, or after a period of continuous hospitalization, to
20file a state income tax return or perform other acts related
21to the department, as would constitute timely filing of the
22return or timely performance of other acts described in section
237508(a) of the Internal Revenue Code. An individual on active
24duty federal military service in the armed forces, armed forces
25military reserve, or national guard who is deployed outside
26the United States in other than a combat zone, qualified
27hazardous duty area, or contingency operation is allowed the
28same additional period of time described in section 7508(a)
29of the Internal Revenue Code to file a state income tax
30return or perform other acts related to the department. For
31the purposes of this subsection, “other acts related to the
32department” includes filing claims for refund for any tax
33administered by the department, making tax payments other than
34withholding payments, filing appeals on the tax matters, filing
35other tax returns, and performing other acts described in the
-16-1department’s rules. The additional time period allowed applies
2to the spouse of the individual described in this subsection
3to the extent the spouse files jointly or separately on the
4combined return form with the individual or when the spouse
5is a party with the individual to any matter for which the
6additional time period is allowed.
75. The director shall determine for the 1989 2022 and each
8subsequent calendar year the annual and cumulative inflation
9factors for each calendar year to be applied to tax years
10beginning on or after January 1 of that calendar year. The
11director shall compute the new dollar amounts tax rates
12 as specified to be adjusted in section 422.5 by the latest
13cumulative inflation factor and round off the result to the
14nearest one dollar one-hundredth of one percent. The annual
15and cumulative inflation factors determined by the director
16are not rules as defined in section 17A.2, subsection 11. The
17director shall determine for the 1990 calendar year and each
18subsequent calendar year the annual and cumulative standard
19deduction factors to be applied to tax years beginning on or
20after January 1 of that calendar year. The director shall
21compute the new dollar amounts of the standard deductions
22specified in section 422.9, subsection 1, by the latest
23cumulative standard deduction factor and round off the result
24to the nearest ten dollars. The annual and cumulative standard
25deduction factors determined by the director are not rules as
26defined in section 17A.2, subsection 11.
277. If married taxpayers file a joint return or file
28separately on a combined return in accordance with rules
29prescribed by the director, both spouses are jointly and
30severally liable for the total tax due on the return, except
31when one spouse is considered to be an innocent spouse under
32criteria established pursuant to section 6015 of the Internal
33Revenue Code.
34 Sec. 37. Section 422.32, subsection 1, paragraph h, Code
352018, is amended to read as follows:
-17- 1h. “Internal Revenue Code” means the Internal Revenue Code
2of 1954, prior to the date of its redesignation as the Internal
3Revenue Code of 1986 by the Tax Reform Act of 1986, or means
4the Internal Revenue Code of 1986, as amended and in effect
5on January 1, 2015. This definition shall not be construed
6to include any amendment to the Internal Revenue Code enacted
7after the date specified in the preceding sentence, including
8any amendment with retroactive applicability or effectiveness.
9 Sec. 38. Section 422.33, subsection 1, paragraphs a, b, c,
10and d, Code 2018, are amended to read as follows:
11a. On the first twenty-five thousand dollars of taxable
12income, or any part thereof, the rate of six percent for tax
13years beginning prior to January 1, 2021, and the rate of
14five and one-half percent for tax years beginning on or after
15January 1, 2021.
16b. On taxable income between twenty-five thousand dollars
17and one hundred thousand dollars or any part thereof, the rate
18of eight percent for tax years beginning prior to January 1,
192021, and the rate of five and one-half percent for tax years
20beginning on or after January 1, 2021.
21c. On taxable income between one hundred thousand dollars
22and two hundred fifty thousand dollars or any part thereof, the
23rate of ten percent for tax years beginning prior to January 1,
242020, the rate of eight percent for tax years beginning during
25the 2020 calendar year, and the rate of five and one-half
26percent for tax years beginning on or after January 1, 2021.
27d. On taxable income of two hundred fifty thousand dollars
28or more, the rate of twelve ten percent for tax years beginning
29on or after January 1, 2019, but prior to January 1, 2021, the
30rate of eight percent for tax years beginning during the 2021
31calendar year, and the rate of seven percent for tax years
32beginning on or after January 1, 2022.
33 Sec. 39. Section 422.33, subsection 4, Code 2018, is amended
34by striking the subsection.
35 Sec. 40. Section 422.35, unnumbered paragraph 1, Code 2018,
-18-1is amended to read as follows:
2The term “net income” means the taxable income before the
3net operating loss deduction, as properly computed for federal
4income tax purposes under the Internal Revenue Code, with the
5following adjustments:
6 Sec. 41. Section 422.35, subsection 4, Code 2018, is amended
7to read as follows:
84. Subtract fifty percent of the federal income taxes paid
9or accrued, as the case may be, during the tax year to the
10extent payment is for a tax year beginning prior to January 1,
112019, adjusted by any federal income tax refunds; and add the
12Iowa income tax deducted in computing said taxable income to
13the extent the tax was deducted for a tax year beginning prior
14to January 1, 2019.
15 Sec. 42. Section 422.35, subsection 6, paragraph a,
16unnumbered paragraph 1, Code 2018, is amended to read as
17follows:
18If For tax years beginning before January 1, 2022, if the
19taxpayer is a small business corporation, subtract an amount
20equal to sixty-five percent of the wages paid to individuals,
21but not to exceed twenty thousand dollars per individual, named
22in subparagraphs (1), (2), and (3) who were hired for the first
23time by the taxpayer during the tax year for work done in this
24state:
25 Sec. 43. Section 422.35, subsection 6A, paragraph a,
26unnumbered paragraph 1, Code 2018, is amended to read as
27follows:
28If For tax years beginning prior to January 1, 2022, if the
29taxpayer is a business corporation and does not qualify for
30the adjustment under subsection 6, subtract an amount equal to
31sixty-five percent of the wages paid to individuals, but shall
32not exceed twenty thousand dollars per individual, named in
33subparagraphs (1) and (2) who were hired for the first time by
34the taxpayer during the tax year for work done in this state:
35 Sec. 44. Section 422.35, subsection 11, Code 2018, is
-19-1amended by striking the subsection and inserting in lieu
2thereof the following:
311. a. Add any federal net operating loss deduction carried
4over from a taxable year beginning prior to January 1, 2019.
5b. Any Iowa net operating loss carried over from a taxable
6year beginning prior to January 1, 2019, may be deducted as
7provided in section 422.35, subsection 11, Code 2018.
8 Sec. 45. Section 422.35, Code 2018, is amended by adding the
9following new subsection:
10 NEW SUBSECTION. 23. The additional first-year depreciation
11allowance authorized in section 168(k) of the Internal Revenue
12Code does not apply in computing net income for state tax
13purposes. If the taxpayer has taken the additional first-year
14depreciation allowance for purposes of computing federal
15taxable income, then the taxpayer shall make the following
16adjustments to federal taxable income when computing net income
17for state tax purposes:
18a. Add the total amount of depreciation taken under section
19168(k) of the Internal Revenue Code for the tax year.
20b. Subtract the amount of depreciation allowable under the
21modified accelerated cost recovery system described in section
22168 of the Internal Revenue Code and calculated without regard
23to section 168(k).
24c. Any other adjustments to gains or losses necessary to
25reflect the adjustments made in paragraphs “a” and “b”. The
26director shall adopt rules for the administration of this
27paragraph.
28 Sec. 46. Section 422.35, subsections 3, 5, 7, 8, 10, 16,
2917, 18, 19, 19A, 19B, 20, 22, and 24, Code 2018, are amended by
30striking the subsections.
31 Sec. 47. Section 541B.3, subsection 1, paragraph b, Code
322018, is amended to read as follows:
33b. A married couple electing to file a joint Iowa individual
34income tax return may establish a joint first-time homebuyer
35savings account. Married taxpayers electing to file separate
-20-1tax returns or separately on a combined tax return for Iowa tax
2purposes shall not establish or maintain a joint first-time
3homebuyer savings account.
4 Sec. 48. Section 541B.6, Code 2018, is amended to read as
5follows:
6541B.6 Tax considerations.
7The state income tax treatment of a first-time homebuyer
8savings account shall be as provided in section 422.7,
9subsection 41, and section 422.9, subsection 2, paragraph “k”.
10 Sec. 49. EFFECTIVE DATE. This division of this Act takes
11effect January 1, 2019.
12 Sec. 50. APPLICABILITY. This division of this Act applies
13to tax years beginning on or after January 1, 2019.
14DIVISION III
15tax credits
16 Sec. 51. Section 8.57E, subsection 2, Code 2018, is amended
17to read as follows:
182. Moneys in the taxpayers trust fund shall only be used
19pursuant to appropriations or transfers made by the general
20assembly for tax relief. During each fiscal year beginning on
21or after July 1, 2014, but before June 30, 2020, in which the
22balance of the taxpayers trust fund equals or exceeds thirty
23million dollars, there is transferred from the taxpayers trust
24fund to the Iowa taxpayers trust fund tax credit fund created
25in section 422.11E, the entire balance of the taxpayers trust
26fund to be used for the Iowa taxpayers trust fund tax credit in
27accordance with section 422.11E, subsection 5.
28 Sec. 52. Section 15.119, subsection 2, paragraph a, Code
292018, is amended by striking the paragraph and inserting in
30lieu thereof the following:
31a. The high quality jobs program administered pursuant
32to sections 15.326 through 15.336. In allocating tax
33credits pursuant to this subsection, the authority shall not
34allocate more than eighty million dollars for purposes of this
35paragraph.
-21-1 Sec. 53. Section 15.119, subsection 2, paragraphs d, e, and
2g, Code 2018, are amended to read as follows:
3d. The tax credits for investments in qualifying businesses
4issued pursuant to section 15E.43. In allocating tax credits
5pursuant to this subsection, the authority shall not allocate
6two more than four million dollars for purposes of this
7paragraph, unless the authority determines that the tax credits
8awarded will be less than that amount.
9e. The tax credits for investments in an innovation fund
10pursuant to section 15E.52. In allocating tax credits pursuant
11to this subsection in a fiscal year in which the allocation for
12purposes of paragraph “d” does not exceed two million dollars,
13the authority shall not allocate more than eight million
14dollars for purposes of this paragraph, unless the authority
15determines that the tax credits awarded will be less than that
16amount. In allocating tax credits pursuant to this subsection
17in a fiscal year in which the allocation for purposes of
18paragraph “d” exceeds two million dollars, the authority shall
19not allocate for purposes of this paragraph an amount that
20exceeds an amount equal to the difference of eight million
21dollars less the amount that the allocation for purposes of
22paragraph “d” exceeds two million dollars for the same fiscal
23year.
24g. The workforce housing tax incentives program administered
25pursuant to sections 15.351 through 15.356. In allocating
26tax credits pursuant to this subsection, the authority shall
27not allocate more than twenty twenty-two million dollars for
28purposes of this paragraph. Of the moneys allocated under this
29paragraph, five seven million dollars shall be reserved for
30allocation to qualified housing projects in small cities, as
31defined in section 15.352, that are registered on or after July
321, 2017.
33 Sec. 54. Section 15.329, subsection 1, paragraph f, Code
342018, is amended to read as follows:
35f. The business shall not be a retail business or a business
-22-1where entrance is limited by a cover charge or membership
2requirement, or a web search portal business as defined in
3section 423.3, subsection 93, or a data center business as
4defined in section 423.3, subsection 95, unless such web search
5portal business or data center business had a physical presence
6in this state prior to January 1, 2019.
7 Sec. 55. Section 15.331A, subsection 1, Code 2018, is
8amended to read as follows:
91. The eligible business shall be entitled to a refund
10of the sales and use taxes paid under chapter 423 for gas,
11electricity, water, or sewer utility services, goods, wares, or
12merchandise, or on services rendered, furnished, or performed
13to or for a contractor or subcontractor and used in the
14fulfillment of a written contract relating to the construction
15or equipping of a facility that is part of a project of the
16eligible business. Taxes attributable to intangible property
17and furniture and furnishings shall not be refunded. However,
18an eligible business shall be entitled to a refund for taxes
19attributable to racks, shelving, and conveyor equipment to be
20used in a warehouse or distribution center subject to section
2115.331C.
22 Sec. 56. Section 15.331C, Code 2018, is amended to read as
23follows:
2415.331C Corporate tax credit for certain sales taxes paid by
25third-party developer.
261. An eligible business may claim a corporate tax credit
27in an amount equal to the sales and use taxes paid by a
28third-party developer under chapter 423 for gas, electricity,
29water, or sewer utility services, goods, wares, or merchandise,
30or on services rendered, furnished, or performed to or for a
31contractor or subcontractor and used in the fulfillment of a
32written contract relating to the construction or equipping of
33a facility of the eligible business. Taxes attributable to
34intangible property and furniture and furnishings shall not
35be included, but taxes attributable to racks, shelving, and
-23-1conveyor equipment to be used in a warehouse or distribution
2center shall be included. Any credit in excess of the tax
3liability for the tax year may be credited to the tax liability
4for the following seven years or until depleted, whichever
5occurs earlier. An eligible business may elect to receive a
6refund of all or a portion of an unused tax credit.
72. A third-party developer shall state under oath, on
8forms provided by the department of revenue, the amount of
9taxes paid as described in subsection 1 and shall submit such
10forms to the department of revenue. The taxes paid shall be
11itemized to allow identification of the taxes attributable
12to racks, shelving, and conveyor equipment to be used in a
13warehouse or distribution center. After receiving the form
14from the third-party developer, the department of revenue shall
15issue a tax credit certificate to the eligible business equal
16to the sales and use taxes paid by a third-party developer
17under chapter 423 for gas, electricity, water, or sewer
18utility services, goods, wares, or merchandise, or on services
19rendered, furnished, or performed to or for a contractor or
20subcontractor and used in the fulfillment of a written contract
21relating to the construction or equipping of a facility.
22The department of revenue shall also issue a tax credit
23certificate to the eligible business equal to the taxes paid
24and attributable to racks, shelving, and conveyor equipment to
25be used in a warehouse or distribution center. The aggregate
26combined total amount of tax refunds under section 15.331A for
27taxes attributable to racks, shelving, and conveyor equipment
28to be used in a warehouse or distribution center and of tax
29credit certificates issued by the department of revenue for the
30taxes paid and attributable to racks, shelving, and conveyor
31equipment to be used in a warehouse or distribution center
32shall not exceed five hundred thousand dollars in a fiscal
33year. If an applicant for a tax credit certificate does not
34receive a certificate for the taxes paid and attributable
35to racks, shelving, and conveyor equipment to be used in a
-24-1warehouse or distribution center, the application shall be
2considered in succeeding fiscal years. The eligible business
3shall not claim a tax credit under this section unless a tax
4credit certificate issued by the department of revenue is
5included with the taxpayer’s tax return for the tax year for
6which the tax credit is claimed. A tax credit certificate
7shall contain the eligible business’s name, address, tax
8identification number, the amount of the tax credit, and other
9information deemed necessary by the department of revenue.
10 Sec. 57. Section 15.335, subsection 7, paragraph b, Code
112018, is amended by striking the paragraph and inserting in
12lieu thereof the following:
13b. For purposes of this section, “Internal Revenue Code”
14means the same as defined in section 422.3.
15 Sec. 58. Section 15.335, subsection 8, Code 2018, is amended
16by striking the subsection and inserting in lieu thereof the
17following:
188. Any tax credit in excess of the taxpayer’s liability for
19the tax year is not refundable and may not be credited to the
20tax liability for any other year.
21 Sec. 59. Section 16.80, subsection 5, paragraphs a and b,
22Code 2018, are amended to read as follows:
23a. Except as provided in paragraph “b”, the tax credit shall
24equal five seven percent of the amount paid to the taxpayer
25under the agreement.
26b. The tax credit shall equal fifteen seventeen percent
27of the amount paid to the taxpayer from crops or animals sold
28under an agreement in which the payment is exclusively made
29from the sale of crops or animals.
30 Sec. 60. Section 16.80, subsection 10, Code 2018, is amended
31to read as follows:
3210. The amount of tax credit certificates that may be issued
33pursuant to this section shall not exceed six eight million
34dollars in any fiscal year. The authority shall issue the tax
35credit certificates on a first-come, first-served basis.
-25-1 Sec. 61. NEW SECTION. 260G.8 Future repeal.
2This chapter is repealed effective July 1, 2025.
3 Sec. 62. Section 403.19A, subsection 3, paragraph c,
4subparagraph (2), Code 2018, is amended to read as follows:
5(2) The pilot project city and the economic development
6authority shall not enter into a withholding agreement after
7June 30, 2018 2019.
8 Sec. 63. Section 404A.4, subsection 1, paragraph a, Code
92018, is amended to read as follows:
10a. Except as provided in subsections 2 and 3, the authority
11shall not award in any one fiscal year an amount of tax credits
12provided in section 404A.2 in excess of forty-five forty
13 million dollars.
14 Sec. 64. Section 404A.4, subsections 2 and 3, Code 2018, are
15amended by striking the subsections.
16 Sec. 65. NEW SECTION. 404A.7 Future repeal.
17This chapter is repealed effective July 1, 2025.
18 Sec. 66. Section 422.10, subsection 1, Code 2018, is amended
19by adding the following new paragraph:
20 NEW PARAGRAPH. 0a. An individual shall only be eligible for
21the credit provided in this section if the business conducting
22the research meets all of the following requirements:
23(1) (a) The business is engaged in the manufacturing,
24life sciences, software engineering, or aviation and aerospace
25industry.
26(b) A person who is engaged in agricultural production
27as defined in section 423.1, or who is a contractor,
28subcontractor, builder, or a contractor-retailer that engages
29in commercial and residential repair and installation,
30including but not limited to heating or cooling installation
31and repair, plumbing and pipe fitting, security system
32installation, or electrical installation and repair, does not
33qualify under subparagraph division (a) and is not eligible
34for the credit. For purposes of this subparagraph division,
35“contractor-retailer” means a business that makes frequent
-26-1retail sales to the public or to other contractors and that
2also engages in the performance of construction contracts.
3(2) The business claims and is allowed a research credit
4for such qualified research expenses under section 41 of the
5Internal Revenue Code for the same taxable year as it is
6claiming the credit provided in this section.
7 Sec. 67. Section 422.10, subsection 3, Code 2018, is amended
8by adding the following new paragraph:
9 NEW PARAGRAPH. 0a. For purposes of this section, “base
10amount” means the product of the fixed-based percentage times
11the average annual gross receipts of the taxpayer for the four
12taxable years preceding the taxable year for which the credit
13is being determined, but in no event shall the base amount be
14less than fifty percent of the qualified research expenses for
15the credit year.
16 Sec. 68. Section 422.10, subsection 3, paragraph a, Code
172018, is amended to read as follows:
18a. For purposes of this section, “base amount”, “basic
19research payment”, and “qualified research expense” mean the
20same as defined for the federal credit for increasing research
21activities under section 41 of the Internal Revenue Code,
22except that for the alternative simplified credit such amounts
23are for research conducted within this state.
24 Sec. 69. Section 422.10, subsection 3, paragraph b, Code
252018, is amended by striking the paragraph.
26 Sec. 70. Section 422.11B, Code 2018, is amended to read as
27follows:
28422.11B Minimum tax credit.
291. a. There For tax years beginning before January 1, 2020,
30there is allowed as a credit against the tax determined in
31section 422.5, subsection 1, paragraphs “a” through “j” for a
32tax year an amount equal to the minimum tax credit for that tax
33year.
34b. The minimum tax credit for a tax year is the excess, if
35any, of the net minimum tax imposed for all prior tax years
-27-1beginning on or after January 1, 1987, but before January 1,
22019, over the amount allowable as a credit under this section
3for those prior tax years.
42. a. The allowable credit under subsection 1 for a
5tax year beginning before January 1, 2019, shall not exceed
6the excess, if any, of the tax determined in section 422.5,
7subsection 1, paragraphs “a” through “j” over the state
8alternative minimum tax as determined in section 422.5,
9subsection 2, Code 2018. The allowable credit under subsection
101 for a tax year beginning in the 2019 calendar year shall not
11exceed the tax determined under section 422.5, subsection 1.
12b. The net minimum tax for a tax year is the excess, if
13any, of the tax determined in section 422.5, subsection 2,
14Code 2018, for the tax year over the tax determined in section
15422.5, subsection 1, paragraphs “a” through “j” for the tax
16year.
173. This section is repealed January 1, 2020, for tax years
18beginning on or after January 1, 2020.
19 Sec. 71. Section 422.11E, Code 2018, is amended by adding
20the following new subsection:
21 NEW SUBSECTION. 6. This section is repealed on January 1,
222020.
23 Sec. 72. Section 422.11S, subsection 6, paragraph a, Code
242018, is amended to read as follows:
25a. “Eligible student” means a student who is a member of a
26household whose total annual income during the calendar year
27before the student receives a tuition grant for purposes of
28this section does not exceed an amount equal to three four
29 times the most recently published federal poverty guidelines in
30the federal register by the United States department of health
31and human services.
32 Sec. 73. Section 422.11S, subsection 8, paragraph a,
33subparagraph (2), Code 2018, is amended to read as follows:
34(2) “Total approved tax credits” means for the tax year
35beginning in the 2006 calendar year, two million five hundred
-28-1thousand dollars, for the tax year beginning in the 2007
2calendar year, five million dollars, for tax years beginning
3on or after January 1, 2008, but before January 1, 2012, seven
4million five hundred thousand dollars, for tax years beginning
5on or after January 1, 2012, but before January 1, 2014, eight
6million seven hundred fifty thousand dollars, and for tax years
7beginning on or after January 1, 2014, but before January 1,
82019, twelve million dollars, and for tax years beginning on or
9after January 1, 2019, thirteen million dollars.
10 Sec. 74. Section 422.12, subsection 2, paragraph b, Code
112018, is amended to read as follows:
12b. A For tax years beginning before January 1, 2022, a
13 tuition credit equal to twenty-five percent of the first one
14thousand dollars which the taxpayer has paid to others for each
15dependent in grades kindergarten through twelve, for tuition
16and textbooks of each dependent in attending an elementary or
17secondary school situated in Iowa, which school is accredited
18or approved under section 256.11, which is not operated for
19profit, and which adheres to the provisions of the federal
20Civil Rights Act of 1964 and chapter 216. Notwithstanding
21any other provision, all other credits allowed under this
22subsection shall be deducted before the tuition credit under
23this paragraph. The department, when conducting an audit of
24a taxpayer’s return, shall also audit the tuition tax credit
25portion of the tax return.
26 Sec. 75. Section 422.12, subsection 2, paragraph c,
27subparagraph (1), Code 2018, is amended to read as follows:
28(1) A For tax years beginning before January 1, 2022,
29a volunteer fire fighter and volunteer emergency medical
30services personnel member credit equal to one hundred dollars
31to compensate the taxpayer for the voluntary services if the
32volunteer served for the entire tax year. A taxpayer who
33is a paid employee of an emergency medical services program
34or a fire department and who is also a volunteer emergency
35medical services personnel member or volunteer fire fighter in
-29-1a city, county, or area governed by an agreement pursuant to
2chapter 28E where the emergency medical services program or
3fire department performs services, shall qualify for the credit
4provided under this paragraph “c”.
5 Sec. 76. Section 422.12, subsection 2, paragraph d,
6subparagraph (1), Code 2018, is amended to read as follows:
7(1) A For tax years beginning before January 1, 2022, a
8 reserve peace officer credit equal to one hundred dollars to
9compensate the taxpayer for services as a reserve peace officer
10if the reserve peace officer served for the entire tax year.
11 Sec. 77. Section 422.33, subsection 5, Code 2018, is amended
12by adding the following new paragraph:
13 NEW PARAGRAPH. 0e. A corporation shall only be
14eligible for the credit provided in this subsection if the
15business conducting the research meets all of the following
16requirements:
17(1) (a) The business is engaged in the manufacturing,
18life sciences, software engineering, or aviation and aerospace
19industry.
20(b) A person who is engaged in agricultural production
21as defined in section 423.1, or who is a contractor,
22subcontractor, builder, or a contractor-retailer that engages
23in commercial and residential repair and installation,
24including but not limited to heating or cooling installation
25and repair, plumbing and pipe fitting, security system
26installation, or electrical installation and repair, does not
27qualify under subparagraph division (a) and is not eligible
28for the credit. For purposes of this subparagraph division,
29“contractor-retailer” means a business that makes frequent
30retail sales to the public or to other contractors and that
31also engages in the performance of construction contracts.
32(2) The business claims and is allowed a research credit
33for such qualified research expenses under section 41 of the
34Internal Revenue Code for the same taxable year as it is
35claiming the credit provided in this subsection.
-30-1 Sec. 78. Section 422.33, subsection 5, paragraph e, Code
22018, is amended by adding the following new subparagraph:
3 NEW SUBPARAGRAPH. (01) For purposes of this section, “base
4amount” means the product of the fixed-based percentage times
5the average annual gross receipts of the taxpayer for the four
6taxable years preceding the taxable year for which the credit
7is being determined, but in no event shall the base amount be
8less than fifty percent of the qualified research expenses for
9the credit year.
10 Sec. 79. Section 422.33, subsection 5, paragraph e,
11subparagraph (1), Code 2018, is amended to read as follows:
12(1) For purposes of this subsection, “base amount”, “basic
13research payment”, and “qualified research expense” mean the
14same as defined for the federal credit for increasing research
15activities under section 41 of the Internal Revenue Code,
16except that for the alternative simplified credit such amounts
17are for research conducted within this state.
18 Sec. 80. Section 422.33, subsection 5, paragraph e,
19subparagraph (2), Code 2018, is amended by striking the
20subparagraph.
21 Sec. 81. Section 422.33, subsection 7, Code 2018, is amended
22to read as follows:
237. a. (1) There For tax years beginning before January 1,
242020, there is allowed as a credit against the tax determined
25in subsection 1 for a tax year an amount equal to the minimum
26tax credit for that tax year.
27(2) The minimum tax credit for a tax year is the excess,
28if any, of the net minimum tax imposed for all prior tax years
29beginning on or after January 1, 1987, but before January
301, 2019, over the amount allowable as a credit under this
31subsection for those prior tax years.
32b. (1) The allowable credit under paragraph “a” for a tax
33year beginning before January 1, 2019, shall not exceed the
34excess, if any, of the tax determined in subsection 1 over
35the state alternative minimum tax as determined in subsection
-31-14. The allowable credit under paragraph “a” for a tax year
2beginning in the 2019 calendar year shall not exceed the tax
3determined in subsection 1.
4(2) The net minimum tax for a tax year is the excess, if
5any, of the tax determined in subsection 4 for the tax year
6over the tax determined in subsection 1 for the tax year.
7c. This subsection is repealed January 1, 2020, for tax
8years beginning on or after January 1, 2020.
9 Sec. 82. 2018 INTERIM TAX CREDIT STUDY. The legislative tax
10expenditure committee created in section 2.45 shall study all
11tax credits available under Iowa law during the 2018 interim.
12The study shall comprehensively review and evaluate each tax
13credit to assess its cost, equity, simplicity, competitiveness,
14public purpose, adequacy, effectiveness, and the extent of
15conformance with the original purpose of the tax credit. The
16legislative tax expenditure committee shall also consider
17new or different tax credits or other incentive programs
18for economic development that will improve predictability,
19flexibility, and utilization, and put Iowa in the best position
20for attracting and retaining business in the future. The
21legislative tax expenditure committee shall submit its findings
22and recommendations to the general assembly for consideration
23during the 2019 legislative session.
24 Sec. 83. FUTURE REPEAL. Sections 15.326, 15.327, 15.329,
2515.330, 15.330A, 15.331A, 15.331C, 15.332, 15.333, 15.333A,
2615.335, 15.335A, 15.335B, 15.335C, and 15.336, Code 2018, are
27repealed effective July 1, 2025.
28 Sec. 84. REPEAL. Sections 422.10A, 422.11I, and 422.11N,
29Code 2018, are repealed.
30 Sec. 85. REPEAL. Section 422.11L, Code 2018, is repealed.
31 Sec. 86. REPEAL. Chapter 190B, Code 2018, is repealed.
32 Sec. 87. EFFECTIVE DATE AND APPLICABILITY.
331. Except as provided in subsections 2 through 15, this
34division of this Act takes effect January 1, 2019, and applies
35to tax years beginning on or after that date.
-32- 12. The section of this division of this Act repealing
2section 422.11L, takes effect July 1, 2018, and applies to
3solar energy system installations occurring on or after that
4date.
53. The section of this division of this Act striking and
6replacing section 15.119, subsection 2, paragraph “a”, takes
7effect July 1, 2018.
84. The section of this division of this Act amending section
915.119, subsection 2, paragraphs “d”, “e”, and “g”, takes
10effect July 1, 2018.
115. The sections of this division of this Act amending
12section 404A.4 take effect July 1, 2018.
136. The section of this division of this Act amending section
1416.80, subsection 10, takes effect July 1, 2018.
157. The sections of this division of this Act enacting
16section 422.10, subsection 1, paragraph “0a”, and enacting
17section 422.33, subsection 5, paragraph “0e”, being deemed of
18immediate importance, take effect upon enactment, and apply
19retroactively to January 1, 2018, for tax years beginning on or
20after that date and for tax returns, including amended returns,
21filed on or after that date for any tax year.
228. The sections of this division of this Act amending
23section 422.10, subsection 3, paragraph “a”, and section
24422.33, subsection 5, paragraph “e”, subparagraph (1), and
25enacting section 422.10, subsection 3, paragraph “0a”, and
26section 422.33, subsection 5, paragraph “e”, subparagraph
27(01), being deemed of immediate importance, take effect upon
28enactment, and apply retroactively to January 1, 2010, for tax
29years beginning on or after that date.
309. The section of this division of this Act amending section
3115.329, subsection 1, paragraph “f”, takes effect July 1, 2018.
3210. The section of this division of this Act amending
33section 403.19A, subsection 3, paragraph “c”, subparagraph (2),
34takes effect July 1, 2018.
3511. The section of this division of this Act establishing
-33-1a 2018 interim tax credit study by the legislative tax
2expenditure committee takes effect July 1, 2018.
312. The sections of this division of this Act amending
4section 15.331A, subsection 1, section 15.331C, and section
515.335, subsection 8, apply to high quality jobs program
6agreements entered into on or after July 1, 2018, and high
7quality jobs program agreements entered into prior to July
81, 2018, shall be governed by section 15.331A, subsection 1,
9section 15.331C, and section 15.335, subsection 8, Code 2018.
1013. The repeal of the accelerated career education program
11by the section of this division of this Act enacting section
12260G.8, shall not constitute grounds for rescission or
13modification of agreements entered into under chapter 260G
14prior to July 1, 2025. Any agreement entered into under
15chapter 260G prior to July 1, 2025, shall remain in effect
16until it expires under its own terms, and shall be governed by
17chapter 260G as that chapter existed immediately prior to July
181, 2025.
1914. The repeal of the historic preservation tax credit
20program by the section of this division of this Act enacting
21section 404A.7, shall not constitute grounds for rescission
22or modification of agreements entered into under chapter 404A
23prior to July 1, 2025. Any agreement entered into under
24chapter 404A prior to July 1, 2025, shall remain in effect
25until it expires under its own terms, and shall be governed by
26chapter 404A as that chapter existed immediately prior to July
271, 2025.
2815. The repeal of the high quality jobs program by the
29section of this division of this Act repealing sections 15.326,
3015.327, 15.329, 15.330, 15.330A, 15.331A, 15.331C, 15.332,
3115.333, 15.333A, 15.335, 15.335A, 15.335B, 15.335C, and 15.336,
32shall not constitute grounds for rescission or modification of
33agreements entered into under those sections prior to July 1,
342025. Any agreement entered into under those sections prior
35to July 1, 2025, shall remain in effect until it expires under
-34-1its own terms, and shall be governed by those sections as they
2existed immediately prior to July 1, 2025.
3DIVISION IV
4FRANCHISE TAX AND MONEYS AND CREDITS TAX
5 Sec. 88. Section 15.293A, subsection 1, paragraph a, Code
62018, is amended to read as follows:
7a. A redevelopment tax credit shall be allowed against
8the taxes imposed in chapter 422, divisions II, III, and V,
9and in chapter 432, and against the moneys and credits tax
10imposed in section 533.329, for a portion of a taxpayer’s
11equity investment, as provided in subsection 3, in a qualifying
12redevelopment project.
13 Sec. 89. Section 15.293A, subsection 2, paragraphs c and f,
14Code 2018, are amended to read as follows:
15c. The tax credit certificate, unless rescinded by the
16authority, shall be accepted by the department of revenue as
17payment for taxes imposed pursuant to chapter 422, divisions
18II, III, and V, and in chapter 432, and for the moneys and
19credits tax imposed in section 533.329, subject to any
20conditions or restrictions placed by the authority upon
21the face of the tax credit certificate and subject to the
22limitations of this section.
23f. A tax credit shall not be claimed by a transferee
24under this section until a replacement tax credit certificate
25identifying the transferee as the proper holder has been
26issued. The transferee may use the amount of the tax credit
27transferred against the taxes imposed in chapter 422, divisions
28II, III, and V, and in chapter 432, and against the moneys and
29credits tax imposed in section 533.329, for any tax year the
30original transferor could have claimed the tax credit. Any
31consideration received for the transfer of the tax credit shall
32not be included as income under chapter 422, divisions II, III,
33and V. Any consideration paid for the transfer of the tax
34credit shall not be deducted from income under chapter 422,
35divisions II, III, and V.
-35-1 Sec. 90. Section 15.333, subsection 1, Code 2018, is amended
2to read as follows:
31. An eligible business may claim a tax credit equal to a
4percentage of the new investment directly related to new jobs
5created or retained by the project. The tax credit shall be
6amortized equally over five calendar years. The tax credit
7shall be allowed against taxes imposed under chapter 422,
8division II, III, or V, and against the moneys and credits tax
9imposed in section 533.329. If the business is a partnership,
10S corporation, limited liability company, cooperative organized
11under chapter 501 and filing as a partnership for federal tax
12purposes, or estate or trust electing to have the income taxed
13directly to the individual, an individual may claim the tax
14credit allowed. The amount claimed by the individual shall
15be based upon the pro rata share of the individual’s earnings
16of the partnership, S corporation, limited liability company,
17cooperative organized under chapter 501 and filing as a
18partnership for federal tax purposes, or estate or trust. The
19percentage shall be determined as provided in section 15.335A.
20 Any tax credit in excess of the tax liability for the tax year
21may be credited to the tax liability for the following seven
22years or until depleted, whichever occurs first.
23 Sec. 91. Section 15.355, subsection 3, paragraph b, Code
242018, is amended to read as follows:
25b. The tax credit shall be allowed against the taxes imposed
26in chapter 422, divisions II, III, and V, and in chapter 432,
27and against the moneys and credits tax imposed in section
28533.329.
29 Sec. 92. Section 15.355, subsection 3, paragraph e,
30subparagraphs (3) and (6), Code 2018, are amended to read as
31follows:
32(3) The tax credit certificate, unless rescinded by the
33authority, shall be accepted by the department of revenue as
34payment for taxes imposed pursuant to chapter 422, divisions
35II, III, and V, and in chapter 432, and for the moneys and
-36-1credits tax imposed in section 533.329, subject to any
2conditions or restrictions placed by the authority upon
3the face of the tax credit certificate and subject to the
4limitations of this program.
5(6) A tax credit shall not be claimed by a transferee
6under this section until a replacement tax credit certificate
7identifying the transferee as the proper holder has been
8issued. The transferee may use the amount of the tax credit
9transferred against the taxes imposed in chapter 422, divisions
10II, III, and V, and in chapter 432, and against the moneys and
11credits tax imposed in section 533.329, for any tax year the
12original transferor could have claimed the tax credit. Any
13consideration received for the transfer of the tax credit shall
14not be included as income under chapter 422, divisions II,
15III, and V. Any consideration paid for the transfer of the tax
16credit shall not be deducted from income under chapter 422,
17divisions II, III, and V.
18 Sec. 93. Section 15E.43, subsection 1, paragraphs a and d,
19Code 2018, are amended to read as follows:
20a. For tax years beginning on or after January 1, 2015,
21a tax credit shall be allowed against the taxes imposed in
22chapter 422, divisions II, III, and V, and in chapter 432, and
23against the moneys and credits tax imposed in section 533.329,
24 for a portion of a taxpayer’s equity investment, as provided in
25subsection 2, in a qualifying business.
26d. For a tax credit claimed against the taxes imposed in
27chapter 422, division II, any tax credit in excess of the
28tax liability is refundable. In lieu of claiming a refund,
29the taxpayer may elect to have the overpayment shown on
30the taxpayer’s final, completed return credited to the tax
31liability for the following tax year. For a tax credit claimed
32against the taxes imposed in chapter 422, divisions III and
33V, and in chapter 432, and against the moneys and credits tax
34imposed in section 533.329, any tax credit in excess of the
35taxpayer’s liability for the tax year may be credited to the
-37-1tax liability for the following three years or until depleted,
2whichever is earlier. A tax credit shall not be carried back
3to a tax year prior to the tax year in which the taxpayer
4redeems the tax credit.
5 Sec. 94. Section 15E.44, subsection 4, Code 2018, is amended
6to read as follows:
74. After verifying the eligibility of a qualifying
8business, the authority shall issue a tax credit certificate
9to be included with the equity investor’s tax return. The tax
10credit certificate shall contain the taxpayer’s name, address,
11tax identification number, the amount of credit, the name of
12the qualifying business, and other information required by the
13department of revenue. The tax credit certificate, unless
14rescinded by the authority, shall be accepted by the department
15of revenue as payment for taxes imposed pursuant to chapter
16422, divisions II, III, and V, and in chapter 432, and for the
17moneys and credits tax imposed in section 533.329, subject to
18any conditions or restrictions placed by the authority upon
19the face of the tax credit certificate and subject to the
20limitations of section 15E.43.
21 Sec. 95. Section 15E.52, subsection 2, paragraph a, Code
222018, is amended to read as follows:
23a. A tax credit shall be allowed against the taxes imposed
24in chapter 422, divisions II, III, and V, and in chapter 432,
25and against the moneys and credits tax imposed in section
26533.329, for a portion of a taxpayer’s equity investment in the
27form of cash in an innovation fund.
28 Sec. 96. Section 15E.52, subsection 13, Code 2018, is
29amended to read as follows:
3013. The transferee may use the amount of the tax credit
31transferred against the taxes imposed in chapter 422, divisions
32II, III, and V, and in chapter 432, and against the moneys and
33credits tax imposed in section 533.329, for any tax year the
34original transferor could have claimed the tax credit. Any
35consideration received for the transfer of the tax credit shall
-38-1not be included as income under chapter 422, divisions II, III,
2and V. Any consideration paid for the transfer of the tax
3credit shall not be deducted from income under chapter 422,
4divisions II, III, and V.
5 Sec. 97. Section 15E.62, subsection 8, Code 2018, is amended
6to read as follows:
78. “Tax credit” means a contingent tax credit issued
8pursuant to section 15E.66 that is available against tax
9liabilities imposed by chapter 422, divisions II, III, and
10V, and by chapter 432 and against the moneys and credits tax
11imposed by section 533.329.
12 Sec. 98. Section 15E.305, subsection 1, Code 2018, is
13amended to read as follows:
141. For tax years beginning on or after January 1, 2003,
15a tax credit shall be allowed against the taxes imposed in
16chapter 422, divisions II, III, and V, and in chapter 432, and
17against the moneys and credits tax imposed in section 533.329
18 equal to twenty-five percent of a taxpayer’s endowment gift to
19an endow Iowa qualified community foundation. An individual
20may claim a tax credit under this section of a partnership,
21limited liability company, S corporation, estate, or trust
22electing to have income taxed directly to the individual. The
23amount claimed by the individual shall be based upon the pro
24rata share of the individual’s earnings from the partnership,
25limited liability company, S corporation, estate, or trust. A
26tax credit shall be allowed only for an endowment gift made to
27an endow Iowa qualified community foundation for a permanent
28endowment fund established to benefit a charitable cause in
29this state. The amount of the endowment gift for which the
30tax credit is claimed shall not be deductible in determining
31taxable income for state income tax purposes. Any tax credit
32in excess of the taxpayer’s tax liability for the tax year may
33be credited to the tax liability for the following five years
34or until depleted, whichever occurs first. A tax credit shall
35not be carried back to a tax year prior to the tax year in which
-39-1the taxpayer claims the tax credit.
2 Sec. 99. Section 331.427, subsection 1, unnumbered
3paragraph 1, Code 2018, is amended to read as follows:
4Except as otherwise provided by state law, county revenues
5from taxes and other sources for general county services shall
6be credited to the general fund of the county, including
7revenues received under sections 9I.11, 101A.3, 101A.7, 123.36,
8123.143, 142D.9, 176A.8, 321.105, 321.152, 321G.7, 321I.8,
9section 331.554, subsection 6, sections 341A.20, 364.3, 368.21,
10423A.7, 428A.8, 433.15, 434.19, 445.57, 453A.35, 458A.21,
11483A.12, 533.329, 556B.1, 583.6, 602.8108, 904.908, and 906.17,
12and the following:
13 Sec. 100. Section 422.60, subsection 2, paragraph a, Code
142018, is amended to read as follows:
15a. In addition to all taxes imposed under this division,
16there is imposed upon each financial institution doing business
17within the state and that is not exempt from the federal income
18tax, the greater of the tax determined in section 422.63 or
19the state alternative minimum tax equal to sixty percent of
20the maximum state franchise tax rate, rounded to the nearest
21one-tenth of one percent, of the state alternative minimum
22taxable income of the taxpayer computed under this subsection.
23 Sec. 101. Section 422.60, subsection 3, paragraph a,
24subparagraph (1), Code 2018, is amended to read as follows:
25(1) There For a financial institution that is not exempt
26from the federal income tax, there is allowed as a credit
27against the tax determined in section 422.63 for a tax year an
28amount equal to the minimum tax credit for that tax year.
29 Sec. 102. Section 422.61, subsections 1, 3, and 4, Code
302018, are amended to read as follows:
311. “Financial institution” means a state bank as defined in
32section 524.103, subsection 41, a state bank chartered under
33the laws of any other state, a national banking association,
34a trust company, a federally chartered savings and loan
35association, an out-of-state state chartered savings bank, a
-40-1credit union as defined in section 533.102 that is incorporated
2or organized under chapter 533 or under the laws of another
3state, a financial institution chartered by the federal
4home loan bank board, a non-Iowa chartered savings and loan
5association, or a production credit association.
63. a. “Net income” means one of the following:
7(1) For a financial institution that is exempt from the
8federal income tax, the total revenue less total expenses as
9properly reported on the financial institution’s internal
10revenue service form 990 covering the same period, with the
11adjustments in paragraph “b” to the extent the taxes, income,
12and deductions described in such adjustments are applicable
13to the financial institution’s calculation of revenues and
14expenses as determined by the director by rule.
15(2) For any other financial institution,the net income of
16the financial institution computed in accordance with section
17422.35, with the following adjustments: in paragraph “b”.
18b. Applicable adjustments in computing “net income”:
19a. (1) Federal income taxes paid or accrued shall not be
20subtracted.
21b. (2) Notwithstanding section 422.35, subsection 2, or
22any other provisions of law, income from obligations of the
23state and its political subdivisions and franchise taxes paid
24or accrued under this division during the taxable year shall
25be added. Income from sales of obligations of the state and
26its political subdivisions and interest and dividend income
27from these obligations are exempt from the taxes imposed by
28this division only if the law authorizing the obligations
29specifically exempts the income from the sale and interest and
30dividend income from the state franchise tax.
31c. (3) Interest and dividends from federal securities shall
32not be subtracted.
33d. (4) Interest and dividends derived from obligations of
34United States possessions, agencies, and instrumentalities,
35including bonds which were purchased after January 1, 1991, and
-41-1issued by the governments of Puerto Rico, Guam, and the Virgin
2Islands shall be added, to the extent they were not included in
3computing federal taxable income.
4e. (5) A deduction disallowed under section 265(b) or
5section 291(e)(1)(B) of the Internal Revenue Code shall be
6subtracted.
7f. (6) A deduction shall not be allowed for that portion of
8the taxpayer’s expenses computed under this paragraph which is
9allocable to an investment in an investment subsidiary. The
10portion of the taxpayer’s expenses which is allocable to an
11investment in an investment subsidiary is an amount which bears
12the same ratio to the taxpayer’s expenses as the taxpayer’s
13average adjusted basis, as computed pursuant to section 1016
14of the Internal Revenue Code, of investment in that investment
15subsidiary bears to the average adjusted basis for all assets
16of the taxpayer. The portion of the taxpayer’s expenses that
17is computed and disallowed under this paragraph shall be added.
18g. (7) Where a financial institution as defined in section
19581 of the Internal Revenue Code is not subject to income tax
20and the shareholders of the financial institution are taxed on
21the financial institution’s income under the provisions of the
22Internal Revenue Code, such tax treatment shall be disregarded
23and the financial institution shall compute its net income for
24franchise tax purposes in the same manner under this subsection
25as a financial institution that is subject to or liable for
26federal income tax under the Internal Revenue Code in effect
27for the applicable year.
284. “Taxable year” means the calendar year or the fiscal year
29ending during a calendar year, for which the tax is payable.
30“Fiscal year” includes a tax period of less than twelve months
31if, under the Internal Revenue Code, a corporation is required
32to file a tax return or internal revenue service form 990
33 covering a tax period of less than twelve months.
34 Sec. 103. Section 422.62, Code 2018, is amended to read as
35follows:
-42- 1422.62 Due and delinquent dates.
2The franchise tax is due and payable on the first day
3following the end of the taxable year of each financial
4institution, and for a financial institution that is exempt
5from the federal income tax, the franchise tax is delinquent
6after the last day of the fifth month following the due date.
7For all other financial institutions, the franchise tax is
8delinquent after the last day of the fourth month following the
9due date or forty-five days after the due date of the federal
10tax return, excluding extensions of time to file, whichever is
11the later. Every financial institution shall file a return as
12prescribed by the director on or before the delinquency date.
13 Sec. 104. Section 422.63, Code 2018, is amended to read as
14follows:
15422.63 Amount of tax.
161. The franchise tax is imposed annually in an amount equal
17to five percent of computed by applying the following rates
18of taxation to the net income received or accrued during the
19taxable year:
20a. On net income from zero to seven million five hundred
21thousand dollars, two percent.
22b. On net income exceeding seven million five hundred
23thousand dollars, four percent.
242. If the net income of the financial institution is derived
25from its business carried on entirely within the state, the tax
26in subsection 1 shall be imposed on the entire net income, but
27if the business is carried on partly within and partly without
28the state, the tax in subsection 1 shall be imposed on the
29 portion of net income reasonably attributable to the business
30within the state, which net income shall be specifically
31allocated or equitably apportioned within and without the state
32under rules of the director.
33 Sec. 105. REPEAL. Section 533.329, Code 2018, is repealed.
34 Sec. 106. PRESERVATION OF EXISTING RIGHTS. This division
35of this Act is not intended and shall not limit, modify,
-43-1or otherwise adversely affect any tax credit or tax credit
2certificate issued, awarded, or allowed before January 1, 2019,
3nor shall it limit, modify, or otherwise adversely affect
4a taxpayer’s right to claim or redeem a tax credit issued,
5awarded, or allowed before January 1, 2019, including but not
6limited to any tax credit carryforward amount. Any amount of
7tax credit that would have been eligible to be claimed by a
8taxpayer on or after January 1, 2019, against the moneys and
9credits tax imposed in section 533.329, Code 2018, shall be
10allowed in the same manner and to the same extent as a credit
11against the franchise tax imposed in chapter 422, division V.
12 Sec. 107. EFFECTIVE DATE. This division of this Act takes
13effect January 1, 2019.
14 Sec. 108. APPLICABILITY. This division of this Act applies
15to tax years beginning on or after January 1, 2019.
16DIVISION V
17CHANGES TO IOWA EDUCATIONAL SAVINGS PLAN TRUST AND IOWA ABLE
18SAVINGS PLAN TRUST
19 Sec. 109. Section 12D.1, Code 2018, is amended to read as
20follows:
2112D.1 Purpose and definitions.
221. The general assembly finds that the general welfare and
23well-being of the state are directly related to educational
24levels and skills of the citizens of the state, and that a
25vital and valid public purpose is served by the creation and
26implementation of programs which encourage and make possible
27the attainment of higher formal education by the greatest
28number of citizens of the state. The state has limited
29resources to provide additional programs for higher education
30funding and the continued operation and maintenance of the
31state’s public institutions of higher education and the general
32welfare of the citizens of the state will be enhanced by
33establishing a program which allows citizens of the state to
34invest money in a public trust for future application to the
35payment of higher education costs qualified education expenses.
-44-1The creation of the means of encouragement for citizens to
2invest in such a program represents the carrying out of a
3vital and valid public purpose. In order to make available
4to the citizens of the state an opportunity to fund future
5higher formal education needs, it is necessary that a public
6trust be established in which moneys may be invested for future
7educational use.
82. As used in this chapter, unless the context otherwise
9requires:
10a. “Account balance limit” means the maximum allowable
11aggregate balance of accounts established for the same
12beneficiary. Account earnings, if any, are included in the
13account balance limit.
14b. “Administrative fund” means the administrative fund
15established under section 12D.4.
16c. “Beneficiary” means the individual designated by a
17participation agreement to benefit from advance payments of
18higher education costs qualified education expenses on behalf
19of the beneficiary.
20d. “Benefits” means the payment of higher education costs
21 qualified education expenses on behalf of a beneficiary by the
22trust during the beneficiary’s attendance at an institution of
23higher education a qualified educational institution.
24e. “Higher education costs” means the same as “qualified
25higher education expenses” as defined insection 529(e)(3) of
26the Internal Revenue Code.
27f. e. “Institution of higher education” means an institution
28described in section 481 of the federal Higher Education Act of
291965, 20 U.S.C. §1088, which is eligible to participate in the
30United States department of education’s student aid programs.
31g. f. “Internal Revenue Code” means the same as defined
32insection 12I.1.
33h. g. “Iowa educational savings plan trust” or “trust” means
34the trust created under section 12D.2.
35i. h. “Participant” means an individual, individual’s legal
-45-1representative, trust, estate, or an organization described
2in section 501(c)(3) of the Internal Revenue Code and exempt
3from taxation under section 501(a) of the Internal Revenue
4Code, that has entered into a participation agreement under
5this chapter for the advance payment of higher education costs
6 qualified education expenses on behalf of a beneficiary.
7j. i. “Participation agreement” means an agreement between
8a participant and the trust entered into under this chapter.
9k. j. “Program fund” means the program fund established
10under section 12D.4.
11k. “Qualified education expenses” means the same as
12“qualified higher education expenses” as defined in section
13529(e)(3) of the Internal Revenue Code, as amended by Pub.L.
14No.115-97, and shall include elementary and secondary school
15expenses for tuition described in section 529(c)(7) of the
16Internal Revenue Code, subject to the limitations imposed by
17section 529(e)(3)(A) of the Internal Revenue Code.
18l. “Qualified educational institution” means an institution
19of higher education, or any elementary or secondary public,
20private, or religious school described in section 529(c)(7) of
21the Internal Revenue Code.
22l. m. “Tuition and fees” “Tuition” means the quarter, or
23 semester, or annual charges imposed to attend an institution
24of higher education a qualified educational institution and
25required as a condition of enrollment or attendance.
26 Sec. 110. Section 12D.2, subsections 2, 5, 9, and 14, Code
272018, are amended to read as follows:
282. Enter into agreements with any institution of higher
29education qualified educational institution, the state, or any
30federal or other state agency, or other entity as required to
31implement this chapter.
325. Carry out studies and projections so the treasurer of
33state may advise participants regarding present and estimated
34future higher education costs qualified education expenses
35 and levels of financial participation in the trust required
-46-1in order to enable participants to achieve their educational
2funding objectives.
39. Make payments to institutions of higher education
4 qualified educational institutions, participants, or
5beneficiaries, pursuant to participation agreements on behalf
6of beneficiaries.
714. Establish, impose, and collect administrative fees
8and charges in connection with transactions of the trust, and
9provide for reasonable service charges, including penalties for
10cancellations and late payments with respect to participation
11agreements.
12 Sec. 111. Section 12D.3, subsections 1 and 2, Code 2018, are
13amended to read as follows:
141. a. Each participation agreement may require a
15participant to agree to invest a specific amount of money in
16the trust for a specific period of time for the benefit of a
17specific beneficiary. A participant shall not be required to
18make an annual contribution on behalf of a beneficiary. The
19maximum contribution that may be deducted for Iowa income tax
20purposes shall not exceed two thousand dollars per beneficiary
21per year adjusted annually to reflect increases in the consumer
22price index. The treasurer of state shall set an account
23balance limit to maintain compliance with section 529 of the
24Internal Revenue Code. A contribution shall not be permitted
25to the extent it causes the aggregate balance of all accounts
26established for the same beneficiary under the trust to exceed
27the applicable account balance limit.
28b. Participation agreements may be amended to provide for
29adjusted levels of payments based upon changed circumstances or
30changes in educational plans.
312. The execution of a participation agreement by the trust
32shall not guarantee in any way that higher education costs
33 qualified education expenses will be equal to projections
34and estimates provided by the trust or that the beneficiary
35named in any participation agreement will attain any of the
-47-1following:
2a. Be admitted to an institution of higher education a
3qualified educational institution.
4b. If admitted, be determined a resident for tuition
5purposes by the institution of higher education qualified
6educational institution.
7c. Be allowed to continue attendance at the institution of
8higher education qualified educational institution following
9admission.
10d. Graduate from the institution of higher education
11 qualified educational institution.
12 Sec. 112. Section 12D.3, Code 2018, is amended by adding the
13following new subsection:
14 NEW SUBSECTION. 5. A participant may designate a successor
15in accordance with rules adopted by the treasurer of state.
16The designated successor shall succeed to the ownership of the
17account in the event of the death of the participant. In the
18event a participant dies and has not designated a successor to
19the account, the following criteria shall apply:
20a. The beneficiary of the account, if eighteen years of
21age or older, shall become the owner of the account as well as
22remain the beneficiary upon filing the appropriate forms in
23accordance with rules adopted by the treasurer of state.
24b. If the beneficiary of the account is under the age of
25eighteen, account ownership shall be transferred to the first
26surviving parent or other legal guardian of the beneficiary to
27file the appropriate forms in accordance with rules adopted by
28the treasurer of state.
29 Sec. 113. Section 12D.4, Code 2018, is amended to read as
30follows:
3112D.4 Program and administrative funds — investment and
32payments.
331. a. The treasurer of state shall segregate moneys
34received by the trust into two funds: the program fund and the
35administrative fund.
-48- 1b. All moneys paid by participants in connection with
2participation agreements shall be deposited as received into
3separate accounts within the program fund.
4c. Contributions to the trust made by participants may only
5be made in the form of cash.
6d. A participant or beneficiary shall not provide investment
7direction regarding program contributions or earnings held by
8the trust may, directly or indirectly, direct the investment of
9any contributions to the trust or any earnings thereon no more
10than two times in a calendar year.
11e. The amount of cash distributions from the trust and all
12other qualified state tuition programs under section 529 of
13the Internal Revenue Code to a beneficiary during any taxable
14year shall, in the aggregate, include no more than ten thousand
15dollars in expenses for tuition in connection with enrollment
16at an elementary or secondary public, private, or religious
17school incurred during the taxable year.
182. Moneys accrued by participants in the program fund of
19the trust may be used for payments to any institution of higher
20education qualified educational institution. Payments can be
21made to the qualified educational institution, the participant,
22or the beneficiary.
23 Sec. 114. Section 12D.6, subsection 1, paragraph a, Code
242018, is amended to read as follows:
25a. A participant retains ownership of all payments made
26under a participation agreement up to the date of utilization
27for payment of higher education costs qualified education
28expenses for the beneficiary.
29 Sec. 115. Section 12D.6, subsections 2, 3, and 5, Code 2018,
30are amended to read as follows:
312. In the event the program is terminated prior to payment
32of higher education costs qualified education expenses for the
33beneficiary, the participant is entitled to a refund of the
34participant’s account balance.
353. The institution of higher education qualified
-49-1educational institution shall obtain ownership of the payments
2made for the higher education costs qualified education
3expenses paid to the institution at the time each payment is
4made to the institution.
55. A participant may transfer ownership rights to another
6eligible individual, including a gift of the ownership rights
7to a minor beneficiary participant, or may transfer funds to
8another plan under the trust or to an ABLE account as permitted
9under section 529(c)(3)(C) of the Internal Revenue Code.
10The transfer shall be made and the property distributed in
11accordance with rules adopted by the treasurer of state or with
12the terms of the participation agreement.
13 Sec. 116. Section 12D.7, Code 2018, is amended to read as
14follows:
1512D.7 Effect of payments on determination of need and
16eligibility for student financial aid.
17A student loan program, student grant program, or other
18program administered by any agency of the state, except as
19may be otherwise provided by federal law or the provisions
20of any specific grant applicable to that law, shall not take
21into account and shall not consider amounts available for
22the payment of higher education costs qualified education
23expenses pursuant to the Iowa educational savings plan trust in
24determining need and eligibility for student aid.
25 Sec. 117. Section 12D.9, subsection 1, paragraph a, Code
262018, is amended to read as follows:
27a. Pursuant to section 12D.3, subsection 1, paragraph “a”,
28a participant may make contributions to an account which is
29established for the purpose of meeting the qualified higher
30 education expenses of the designated beneficiary of the
31account.
32 Sec. 118. Section 422.7, subsection 32, paragraph c, Code
332018, is amended by striking the paragraph and inserting in
34lieu thereof the following:
35c. (1) Add, to the extent previously deducted as a
-50-1contribution to the trust, the amount resulting from a
2withdrawal or transfer made by the taxpayer from the Iowa
3educational savings plan trust for purposes other than any of
4the following:
5(a) The payment of qualified higher education expenses.
6(b) The payment of tuition to an elementary or secondary
7school if the tuition amounts are qualified education expenses.
8(c) A change in beneficiaries under, or transfer to another
9account within, the Iowa educational savings plan trust, or a
10transfer to the Iowa ABLE savings plan trust, provided such
11change or transfer is permitted under section 12D.6, subsection
125.
13(2) For purposes of this paragraph:
14(a) “Elementary or secondary school” means an elementary
15or secondary school in this state which is accredited under
16section 256.11, and adheres to the provisions of the federal
17Civil Rights Act of 1964 and chapter 216.
18(b) “Institution of higher education”, “qualified education
19expenses”, and “tuition” all mean the same as defined in section
2012D.1, subsection 2.
21(c) (i) “Qualified higher education expenses” means the same
22as defined in section 529(e)(3) of the Internal Revenue Code.
23(ii) For purposes of this subparagraph division (c),
24“Internal Revenue Code” means the Internal Revenue Code of
251954, prior to the date of its redesignation as the Internal
26Revenue Code of 1986 by the Tax Reform Act of 1986, or means
27the Internal Revenue Code of 1986 as amended and in effect on
28January 1, 2018. This definition shall not be construed to
29include any amendment to the Internal Revenue Code enacted
30after the date specified in the preceding sentence, including
31any amendment with retroactive applicability or effectiveness.
32 Sec. 119. Section 422.7, subsection 34, Code 2018, is
33amended to read as follows:
3434. a. (1) Subtract the amount contributed during the tax
35year on behalf of a designated beneficiary that is a resident
-51-1of this state to the Iowa ABLE savings plan trust or to the
2qualified ABLE program with which the state has contracted
3pursuant to section 12I.10, not to exceed the maximum
4contribution level established in section 12I.3, subsection 1,
5paragraph “d”, or section 12I.10, subsection 2, paragraph “a”,
6as applicable.
7(2) This paragraph “a” shall not apply to any amount
8of contribution that represents a transfer from the Iowa
9educational savings plan trust created in chapter 12D that
10meets the requirements of subsection 32, paragraph “c”,
11subparagraph (1), subparagraph division (c), and that was
12previously deducted as a contribution to the Iowa educational
13savings plan trust.
14b. Add the amount resulting from the cancellation of a
15participation agreement refunded to the taxpayer as an account
16owner in the Iowa ABLE savings plan trust or the qualified
17ABLE program with which the state has contracted pursuant to
18section 12I.10 to the extent previously deducted pursuant
19to this subsection by the taxpayer or any other person as a
20contribution to the trust or qualified ABLE program, or to the
21extent the amount was previously deducted by the taxpayer or
22any other person pursuant to subsection 32, paragraph “a”, and
23qualified as a transfer under paragraph “a”, subparagraph (2),
24of this subsection.
25c. Add the amount resulting from a withdrawal made by a
26taxpayer from the Iowa ABLE savings plan trust or the qualified
27ABLE program with which the state has contracted pursuant to
28section 12I.10 for purposes other than the payment of qualified
29disability expenses to the extent previously deducted pursuant
30to this subsection by the taxpayer or any other person as a
31contribution to the trust or qualified ABLE program, or to the
32extent the amount was previously deducted by the taxpayer or
33any other person pursuant to subsection 32, paragraph “a”, and
34qualified as a transfer under paragraph “a”, subparagraph (2),
35of this subsection.
-52-1 Sec. 120. Section 627.6, Code 2018, is amended by adding the
2following new subsection:
3 NEW SUBSECTION. 17. The debtor’s interest, whether as
4participant or beneficiary, in contributions and assets,
5including the accumulated earnings and market increases in
6value, held in an account in the Iowa educational savings plan
7trust organized under chapter 12D.
8 Sec. 121. EFFECTIVE DATE. This division of this Act, being
9deemed of immediate importance, takes effect upon enactment.
10 Sec. 122. RETROACTIVE APPLICABILITY.
111. Except as provided in subsection 2, this division of this
12Act applies retroactively to January 1, 2018, for withdrawals
13from the Iowa educational savings plan trust made on or after
14that date.
152. The sections of this division of this Act amending
16section 422.7 apply retroactively to January 1, 2018, for tax
17years beginning on or after that date, and for withdrawals from
18the Iowa educational savings plan trust made on or after that
19date.
20DIVISION VI
21SALES AND USE TAXES
22 Sec. 123. Section 15J.4, subsection 3, paragraph f, Code
232018, is amended to read as follows:
24f. The total aggregate amount of state sales tax revenues
25and state hotel and motel tax revenues that may be approved by
26the board for remittance to all municipalities and that may
27be transferred to the state reinvestment district fund under
28section 423.2, subsection 11, 423.2A or section 423A.6, and
29remitted to all municipalities having a reinvestment district
30under this chapter shall not exceed one hundred million
31dollars.
32 Sec. 124. Section 15J.5, subsection 1, paragraph a, Code
332018, is amended to read as follows:
34a. The department shall calculate quarterly the amount of
35new state sales tax revenues for each district established in
-53-1the state to be deposited in the state reinvestment district
2fund created in section 15J.6, pursuant to section 423.2,
3subsection 11, paragraph “b” 423.2A, subsection 2, subject to
4remittance limitations established by the board pursuant to
5section 15J.4, subsection 3.
6 Sec. 125. Section 15J.6, subsection 1, Code 2018, is amended
7to read as follows:
81. A state reinvestment district fund is established in the
9state treasury under the control of the department consisting
10of the new state sales tax revenues collected within each
11district and deposited in the fund pursuant to section 423.2,
12subsection 11, paragraph “b” 423.2A, subsection 2, and the
13new state hotel and motel tax revenues collected within each
14district and deposited in the fund pursuant to section 423A.6.
15Moneys deposited in the fund are appropriated to the department
16for the purposes of this section. Moneys in the fund shall
17only be used for the purposes of this section.
18 Sec. 126. Section 418.11, subsection 1, Code 2018, is
19amended to read as follows:
201. The department of revenue shall calculate quarterly the
21amount of increased sales tax revenues for each governmental
22entity approved to use sales tax increment revenues and the
23amount of such revenues to be transferred to the sales tax
24increment fund pursuant to section 423.2, subsection 11,
25paragraph “b” 423.2A, subsection 2.
26 Sec. 127. Section 418.12, subsection 1, Code 2018, is
27amended to read as follows:
281. A sales tax increment fund is established as a separate
29and distinct fund in the state treasury under the control of
30the department of revenue consisting of the amount of the
31increased state sales and services tax revenues collected by
32the department of revenue within each applicable area specified
33in section 418.11, subsection 3, and deposited in the fund
34pursuant to section 423.2, subsection 11, paragraph “b” 423.2A,
35subsection 2. Moneys deposited in the fund are appropriated
-54-1to the department of revenue for the purposes of this section.
2Moneys in the fund shall only be used for the purposes of this
3section.
4 Sec. 128. Section 421.26, Code 2018, is amended to read as
5follows:
6421.26 Personal liability for tax due.
7If a licensee or other person under section 452A.65, a
8retailer or purchaser under chapter 423A, 423B, or 423E, or
9section sections 423.14, 423.14A, 423.29, 423.31, 423.32, or
10423.33, or a retailer or purchaser under section 423.32, or
11 a user under section 423.34, or a permit holder or licensee
12under section 453A.13, 453A.16, or 453A.44 fails to pay a tax
13under those sections when due, an officer of a corporation
14or association, notwithstanding section 489.304, a member or
15manager of a limited liability company, or a partner of a
16partnership, having control or supervision of or the authority
17for remitting the tax payments and having a substantial legal
18or equitable interest in the ownership of the corporation,
19association, limited liability company, or partnership, who has
20intentionally failed to pay the tax is personally liable for
21the payment of the tax, interest, and penalty due and unpaid.
22However, this section shall not apply to taxes on accounts
23receivable. The dissolution of a corporation, association,
24limited liability company, or partnership shall not discharge a
25person’s liability for failure to remit the tax due.
26 Sec. 129. Section 423.1, subsection 5, Code 2018, is amended
27to read as follows:
285. “Agricultural production” includes means the commercial
29 production of livestock, milk, honey, eggs, or plants,
30including but not limited to flowering, ornamental, or
31vegetable plants in commercial greenhouses or otherwise,
32and commercial production from aquaculture, and commercial
33 production from silvicultural activities. “Agricultural
34products” includes flowering, ornamental, or vegetable plants
35and those products of aquaculture and silviculture.
-55-1 Sec. 130. Section 423.1, subsection 24, paragraph a, Code
22018, is amended to read as follows:
3a. “Lease or rental” means any transfer of possession or
4control of, or access to, tangible personal property for a
5fixed or indeterminate term for consideration. A “lease or
6rental” may include future options to purchase or extend.
7 Sec. 131. Section 423.1, subsection 37, Code 2018, is
8amended to read as follows:
937. “Place of business” means any warehouse, store,
10place, office, building, or structure where goods, wares, or
11merchandise tangible personal property or services are offered
12for sale at retail or where any taxable amusement is conducted,
13or each office where gas, water, heat, communication, or
14electric services are offered for sale at retail. When a
15retailer or amusement operator sells merchandise by means of
16vending machines or operates music or amusement devices by
17coin-operated machines at more than one location within the
18state, the office, building, or place where the books, papers,
19and records of the taxpayer are kept shall be deemed to be the
20taxpayer’s place of business.
21 Sec. 132. Section 423.1, subsection 47, Code 2018, is
22amended to read as follows:
2347. “Retailer” means and includes every person engaged in
24the business of selling tangible personal property or taxable
25services at retail, or the furnishing of gas, electricity,
26water, or communication service, and tickets or admissions to
27places of amusement and athletic events or operating amusement
28devices or other forms of commercial amusement from which
29revenues are derived. However, when in the opinion of the
30director it is necessary for the efficient administration of
31this chapter to regard any salespersons, representatives,
32truckers, peddlers, or canvassers as agents of the dealers,
33distributors, supervisors, employers, or persons under whom
34they operate or from whom they obtain tangible personal
35property or services sold by them irrespective of whether or
-56-1not they are making sales on their own behalf or on behalf of
2such dealers, distributors, supervisors, employers, or persons,
3the director may so regard them, and may regard such dealers,
4distributors, supervisors, employers, or persons as retailers
5for the purposes of this chapter. “Retailer” includes a seller
6obligated to collect sales or use tax, including any person
7obligated to collect sales and use tax pursuant to section
8423.14A.
9 Sec. 133. Section 423.1, subsection 48, paragraph a, Code
102018, is amended to read as follows:
11a. “Retailer maintaining a place of business in this state”
12or any like term includes any of the following:
13(1) Aretailer having or maintaining within this state,
14directly or by a subsidiary, an office, distribution house,
15sales house, warehouse, or other place of business, or any
16representative operating within this state under the authority
17of the retailer or its subsidiary, irrespective of whether that
18place of business or representative is located here permanently
19or temporarily, or whether the retailer or subsidiary is
20admitted to do business within this state pursuant to chapter
21490.
22(2) A person obligated to collect sales and use tax pursuant
23to section 423.14A.
24 Sec. 134. Section 423.1, subsection 48, paragraph b,
25subparagraph (1), unnumbered paragraph 1, Code 2018, is amended
26to read as follows:
27A retailer shall be presumed to be maintaining a place of
28business in this state, as defined in for purposes of paragraph
29“a”, subparagraph (1), if any person that has substantial nexus
30in this state, other than a person acting in its capacity as a
31common carrier, does any of the following:
32 Sec. 135. Section 423.1, subsection 48, paragraph b,
33subparagraph (1), subparagraph division (b), Code 2018, is
34amended to read as follows:
35(b) Maintains an office, distribution facility, warehouse,
-57-1storage place, or similar place of business in this state to
2facilitate the delivery of personal property or services sold
3by the retailer to the retailer’s customers.
4 Sec. 136. Section 423.1, subsection 50, Code 2018, is
5amended to read as follows:
650. “Sales” or “sale” means any transfer, exchange, or
7barter, conditional or otherwise, in any manner or by any means
8whatsoever, for consideration, including but not limited to any
9such transfer, exchange, or barter on a subscription basis.
10 Sec. 137. Section 423.1, Code 2018, is amended by adding the
11following new subsection:
12 NEW SUBSECTION. 55A. “Sold at retail in the state” and
13other references to sales “in the state” or “in this state”
14includes but is not limited to sales sourced to this state
15under this chapter.
16 Sec. 138. Section 423.1, Code 2018, is amended by adding the
17following new subsection:
18 NEW SUBSECTION. 57A. “Subscription” means any arrangement
19in which a person has the right or ability to access, receive,
20use, obtain, purchase, or otherwise acquire tangible personal
21property or services on a permanent or less than permanent
22basis, regardless of whether the person actually accesses,
23receives, uses, obtains, purchases, or otherwise acquires such
24tangible personal property or service.
25 Sec. 139. Section 423.1, subsections 62, 63, and 64, Code
262018, are amended to read as follows:
2762. “Use” means and includes the exercise by any person of
28any right or power over or access to tangible personal property
29incident to the ownership of that property, or any right or
30power over or access to the product or result of a service.
31A retailer’s or building contractor’s sale of manufactured
32housing for use in this state, whether in the form of tangible
33personal property or of realty, is a use of that property for
34the purposes of this chapter.
3563. “Use tax” means the tax levied under subchapter III of
-58-1this chapter for which the retailer collects and remits tax to
2the department.
364. “User” means the immediate recipient of the personal
4property or services who is entitled to exercise a right of or
5 power over or access to the personal property, or the product
6or result of such services.
7 Sec. 140. Section 423.2, subsection 1, paragraph a,
8subparagraph (1), Code 2018, is amended to read as follows:
9(1) Sales of engraving, photography, retouching, printing,
10and binding services.
11 Sec. 141. Section 423.2, subsection 6, Code 2018, is amended
12to read as follows:
136. a. The sales price of any of the following enumerated
14services is subject to the tax imposed by subsection 5:
15a. alteration Alteration and garment repair; armored.
16b. Armoredcar; vehicle.
17c. Vehiclerepair; battery.
18d. Battery, tire, and allied; investment.
19e. Investmentcounseling; service.
20f. Servicecharges of all financial institutions; barber.
21For the purposes of this paragraph, “financial institutions”
22 means all national banks, federally chartered savings and loan
23associations, federally chartered savings banks, federally
24chartered credit unions, banks organized under chapter 524,
25credit unions organized under chapter 533, and all banks,
26savings banks, credit unions, and savings and loan associations
27chartered or otherwise created under the laws of any state and
28doing business in Iowa.
29g. Barberand beauty; boat.
30h. Boatrepair; vehicle.
31i. Vehicle wash and wax; campgrounds; carpentry; roof.
32j. Campgrounds.
33k. Carpentry.
34l. Roof, shingle, and glass repair; dance.
35m. Danceschools and dance studios; dating.
-59- 1n. Datingservices; dry.
2o. Drycleaning, pressing, dyeing, and laundering excluding
3the use of self-pay washers and dryers; electrical.
4p. Electricaland electronic repair and installation;
5excavating.
6q. Excavatingand grading; farm.
7r. Farmimplement repair of all kinds; flying.
8s. Flyingservice; furniture.
9t. Furniture, rug, carpet, and upholstery repair and
10cleaning; fur.
11u. Furstorage and repair; golf.
12v. Golfand country clubs and all commercial recreation;
13gun.
14w. Gunand camera repair; house.
15x. Houseand building moving; household.
16y. Householdappliance, television, and radio repair;
17janitorial.
18z. Janitorialand building maintenance or cleaning; jewelry.
19aa. Jewelryand watch repair; lawn.
20ab. Lawncare, landscaping, and tree trimming and removal;.
21ac. Personal transportation service, including but not
22limited to taxis, driver service, ride sharing service, rides
23for hire, andlimousine service, including driver; machine.
24ad. Machineoperator; machine.
25ae. Machinerepair of all kinds; motor.
26af. Motorrepair; motorcycle.
27ag. Motorcycle, scooter, and bicycle repair; oilers.
28ah. Oilersand lubricators; office.
29ai. Officeand business machine repair; painting.
30aj. Painting, papering, and interior decorating; parking.
31ak. Parkingfacilities; pay.
32al. Pay television; pet.>
33am. Petgrooming; pipe.
34an. Pipefitting and plumbing; wood.
35ao. Woodpreparation; executive.
-60- 1ap. Executivesearch agencies; private.
2aq. Privateemployment agencies, excluding services for
3placing a person in employment where the principal place of
4employment of that person is to be located outside of the
5state; reflexology; security.
6ar. Reflexology.
7as. Securityand detective services, excluding private
8security and detective services furnished by a peace officer
9with the knowledge and consent of the chief executive officer
10of the peace officer’s law enforcement agency; sewage.
11at. Sewageservices for nonresidential commercial
12operations; sewing.
13au. Sewingand stitching; shoe.
14av. Shoerepair and shoeshine; sign.
15aw. Signconstruction and installation; storage.
16ax. Storageof household goods, mini-storage, and
17warehousing of raw agricultural products; swimming.
18ay. Swimmingpool cleaning and maintenance; tanning.
19az. Tanningbeds or salons; taxidermy.
20ba. Taxidermyservices; telephone.
21bb. Telephoneanswering service; test.
22bc. Testlaboratories, including mobile testing laboratories
23and field testing by testing laboratories, and excluding tests
24on humans or animals and excluding environmental testing
25services; termite.
26bd. Termite, bug, roach, and pest eradicators; tin.
27be. Tinand sheet metal repair; transportation.
28bf. Transportationservice consisting of the rental of
29recreational vehicles or recreational boats, or the rental of
30vehicles subject to registration which are registered for a
31gross weight of thirteen tons or less for a period of sixty
32days or less, or the rental of aircraft for a period of sixty
33days or less;.
34bg. Turkish baths, massage, and reducing salons, excluding
35services provided by massage therapists licensed under chapter
-61-1152C; water.
2bh. Waterconditioning and softening; weighing; welding;
3well.
4bi. Weighing.
5bj. Welding.
6bk. Welldrilling; wrapping.
7bl. Wrapping, packing, and packaging of merchandise other
8than processed meat, fish, fowl, and vegetables; wrecking.
9bm. Wreckingservice; wrecker.
10bn. Wreckerand towing.
11b. For the purposes of this subsection, “financial
12institutions” means all national banks, federally chartered
13savings and loan associations, federally chartered savings
14banks, federally chartered credit unions, banks organized under
15chapter 524, credit unions organized under chapter 533, and
16all banks, savings banks, credit unions, and savings and loan
17associations chartered or otherwise created under the laws of
18any state and doing business in Iowa.
19bo. Photography.
20bp. Retouching.
21 Sec. 142. Section 423.2, subsection 8, Code 2018, is amended
22by adding the following new paragraph:
23 NEW PARAGRAPH. d. A transaction that otherwise meets
24the definition of “bundled transaction” as defined in this
25subsection is not a bundled transaction if it is any of the
26following:
27(1) The retail sale of tangible personal property and a
28service where the tangible personal property is essential
29to the use of the service, and is provided exclusively in
30connection with the service, and the true object of the
31transaction is the service.
32(2) The retail sale of services where one service is
33provided that is essential to the use or receipt of a second
34service and the first service is provided exclusively in
35connection with the second service and the true object of the
-62-1transaction is the second service.
2(3) (a) A transaction that includes taxable products and
3nontaxable products and the purchase price or sales price of
4the taxable products is de minimis.
5(b) For purposes of this subparagraph, “de minimis” means
6the seller’s purchase or sales price of the taxable products
7is ten percent or less of the total purchase price or sales
8price of the bundled products. Sellers shall use either the
9purchase price or the sale price of the products to determine
10if the taxable products are de minimis. Sellers may not use
11a combination of the purchase price and sales price of the
12products to determine if the taxable products are de minimis.
13(4) The retail sale of exempt tangible personal property and
14taxable tangible personal property where all of the following
15apply:
16(a) The transaction includes food and food ingredients,
17drugs, durable medical equipment, mobility enhancing equipment,
18prosthetic devices, or medical supplies.
19(b) The seller’s purchase price or sales price of the
20taxable tangible personal property is fifty percent or less
21of the total purchase price or sales price of the bundled
22tangible personal property. Sellers may not use a combination
23of the purchase price and sales price of the tangible personal
24property when making the fifty percent determination for a
25transaction.
26 Sec. 143. Section 423.2, subsections 10, 11, and 12, Code
272018, are amended by striking the subsections.
28 Sec. 144. NEW SECTION. 423.2A Deposit and transfer of
29revenues.
301. a. All revenues arising under the operation of the
31provisions of this subchapter II shall be deposited into the
32general fund of the state.
33b. Subsequent to the deposit into the general fund of
34the state, the director shall credit an amount equal to the
35product of the sales tax rate imposed in section 423.2 times
-63-1the sales price of the tangible personal property or services
2furnished to purchasers at a baseball and softball complex that
3has received an award under section 15F.207 and that meets
4the qualifications of section 423.4, subsection 10, into the
5baseball and softball complex sales tax rebate fund created
6under section 423.4, subsection 10, paragraph “e”. The director
7shall credit the moneys beginning the first day of the quarter
8following July 1, 2016. This paragraph is repealed thirty
9days following the date on which five million dollars in total
10rebates have been provided under section 423.4, subsection 10.
112. Subsequent to the deposit into the general fund of the
12state pursuant to subsection 1, the department shall do the
13following in the order prescribed:
14a. Transfer the revenues collected under chapter 423B.
15b. Transfer from the remaining revenues the amounts required
16under Article VII, section 10, of the Constitution of the State
17of Iowa to the natural resources and outdoor recreation trust
18fund created in section 461.31, if applicable.
19c. Transfer one-sixth of the remaining revenues to the
20secure an advanced vision for education fund created in section
21423F.2. This paragraph “c” is repealed December 31, 2029.
22d. Transfer to the baseball and softball complex sales tax
23rebate fund that portion of the sales tax receipts described
24in subsection 1, paragraph “b”, remaining after the transfers
25required under paragraphs “a”, “b”, and “c” of this subsection
262. This paragraph is repealed thirty days following the date
27on which five million dollars in total rebates have been
28provided under section 423.4, subsection 10.
29e. Beginning the first day of the calendar quarter
30beginning on the reinvestment district’s commencement date,
31subject to remittance limitations established by the economic
32development authority board pursuant to section 15J.4,
33subsection 3, transfer to a district account created in the
34state reinvestment district fund for each reinvestment district
35established under chapter 15J, the amount of new state sales
-64-1tax revenue, determined in section 15J.5, subsection 1,
2paragraph “b”, in the district, that remains after the prior
3transfers required under this subsection 2. Such transfers
4shall cease pursuant to section 15J.8.
5f. Subject to the limitation on the calculation and
6deposit of sales tax increment revenues in section 418.12,
7beginning the first day of the quarter following adoption
8of the resolution pursuant to section 418.4, subsection 3,
9paragraph “d”, transfer to the account created in the sales tax
10increment fund for each governmental entity approved to use
11sales tax increment revenues under chapter 418, that portion
12of the increase in sales tax revenue, determined in section
13418.11, subsection 2, paragraph “d”, in the applicable area of
14the governmental entity, that remains after the other transfers
15required under this subsection 2.
16g. Beginning the first day of the quarter following July
171, 2014, transfer to the raceway facility tax rebate fund
18created in section 423.4, subsection 11, paragraph “e”, that
19portion of the sales tax receipts collected and remitted upon
20sales of tangible personal property or services furnished by
21retailers at a raceway facility meeting the qualifications of
22section 423.4, subsection 11, that remains after the transfers
23required in paragraphs “a” through “f” of this subsection
242. This subparagraph is repealed June 30, 2025, or thirty
25days following the date on which an amount of total rebates
26specified in section 423.4, subsection 11, paragraph “c”,
27subparagraph (4), subparagraph division (a) or (b), whichever
28is applicable, has been provided or thirty days following the
29date on which rebates cease as provided in section 423.4,
30subsection 11, paragraph “c”, subparagraph (5), whichever is
31earliest.
323. Of the amount of sales tax revenue actually transferred
33per quarter pursuant to subsection 2, paragraphs “e” and “f”,
34the department shall retain an amount equal to the actual cost
35of administering the transfers under subsection 2, paragraphs
-65-1“e” and “f”, or twenty-five thousand dollars, whichever is
2less. The amount retained by the department pursuant to this
3subsection shall be divided pro rata each quarter between
4the amounts that would have been transferred pursuant to
5subsection 2, paragraphs “e” and “f”, without the deduction
6made by operation of this subsection. Revenues retained by
7the department pursuant to this subsection shall be considered
8repayment receipts as defined in section 8.2.
9 Sec. 145. Section 423.3, subsections 2 and 17, Code 2018,
10are amended to read as follows:
112. The sales price of sales for resale of tangible personal
12property or taxable services, or for resale of tangible
13personal property in connection with the furnishing of taxable
14services, except for sales, the following:
15a. Sales,other than leases or rentals, which are sales
16to nonqualified dealers of machinery, equipment, attachments,
17and replacement parts specifically enumerated in subsection 37
18and used in the manner described in subsection 37 or the. For
19purposes of this paragraph, “nonqualified dealer” means any
20dealer who is not a party to a dealership agreement, as those
21terms are defined in section 322F.1.
22b. Thepurchase of tangible personal property, the leasing
23or rental of which is exempted from tax by subsection 49.
2417. The sales price of all goods, wares, or merchandise,
25 tangible personal property or services, used for educational
26purposes sold to any private nonprofit educational institution
27in this state. For the purpose of this subsection, “educational
28institution” means an institution which primarily functions
29as a school, college, or university with students, faculty,
30and an established curriculum. The faculty of an educational
31institution must be associated with the institution and the
32curriculum must include basic courses which are offered every
33year. “Educational institution” includes an institution
34primarily functioning as a library.
35 Sec. 146. Section 423.3, subsection 3, Code 2018, is amended
-66-1by striking the subsection and inserting in lieu thereof the
2following:
33. a. The sales price of tangible personal property used
4primarily in agricultural production by a commercial farmer
5if the cost of the tangible personal property is properly
6claimed as a business deduction for purposes of chapter 422 and
7the tangible personal property is used on land eligible for
8the agricultural land credit created in chapter 426. If the
9other requirements of this subsection are satisfied, “tangible
10personal property” includes but is not limited to the following:
11(1) Farm machinery and equipment, including supplies,
12replacement parts, and auxiliary attachments which improve the
13performance, safety, operation, or efficiency of the machinery
14and equipment.
15(2) Agricultural breeding livestock, domesticated fowl,
16preserve whitetail as defined in section 484C.1, and draft
17horses.
18b. Vehicles subject to registration, as defined in section
19423.1, and replacement parts for such vehicles, are not exempt
20under paragraph “a” of this subsection.
21 Sec. 147. Section 423.3, subsections 3A, 4, 5, 6, 7, 8,
229, 10, 11, 12, 13, 14, 15, and 16, Code 2018, are amended by
23striking the subsections.
24 Sec. 148. Section 423.3, subsections 21, 22, and 31, Code
252018, are amended to read as follows:
2621. The sales price of goods, wares, or merchandise,
27 tangible personal property or of services, used for
28educational, scientific, historic preservation, or aesthetic
29purpose sold to a nonprofit private museum.
3022. The sales price from sales of goods, wares, or
31merchandise, tangible personal property or from services
32furnished, to a nonprofit private art center to be used in the
33operation of the art center.
3431. a. The sales price of goods, wares, or merchandise
35 tangible personal property sold to and of services furnished,
-67-1and used for public purposes sold to a tax-certifying or
2tax-levying body of the state or a governmental subdivision
3of the state, including regional transit systems, as defined
4in section 324A.1, the state board of regents, department
5of human services, state department of transportation, any
6municipally owned solid waste facility which sells all or part
7of its processed waste as fuel to a municipally owned public
8utility, and all divisions, boards, commissions, agencies,
9or instrumentalities of state, federal, county, or municipal
10government which have no earnings going to the benefit of an
11equity investor or stockholder, except any of the following:
12(1) a. The sales price of goods, wares, or merchandise
13 tangible personal property sold to, or of services furnished,
14and used by or in connection with the operation of any
15municipally owned public utility engaged in selling gas,
16electricity, heat, pay television service, or communication
17service to the general public.
18(2) b. The sales price of furnishing of sewage services to
19a county or municipality on behalf of nonresidential commercial
20operations.
21(3) c. The furnishing of solid waste collection and
22disposal service to a county or municipality on behalf of
23nonresidential commercial operations located within the county
24or municipality.
25b. The exemption provided by this subsection shall also
26apply to all such sales of goods, wares, or merchandise or of
27services furnished and subject to use tax.
28 Sec. 149. Section 423.3, subsection 47, paragraph d,
29subparagraph (4), Code 2018, is amended by striking the
30subparagraph and inserting in lieu thereof the following:
31(4) (a) “Manufacturer” means a business that primarily
32purchases, receives, or holds personal property of any
33description for the purpose of adding to its value by a process
34of manufacturing with a view to selling the property for gain
35or profit.
-68- 1(b) “Manufacturer” includes contract manufacturers. A
2contract manufacturer is a manufacturer that otherwise falls
3within the definition of manufacturer, except that a contract
4manufacturer does not sell the tangible personal property
5the contract manufacturer processes on behalf of other
6manufacturers.
7(c) For purposes of this subparagraph, “business” means
8those businesses conducted for profit, but excludes professions
9and occupations and nonprofit organizations.
10(d) For purposes of this subparagraph, “manufacturing”
11means those activities commonly understood within the ordinary
12meaning of the term, and shall include:
13(i) Refining.
14(ii) Purifying.
15(iii) Combining of different materials.
16(iv) Packing of meats.
17(v) Activities subsequent to the extractive process of
18quarrying or mining, such as crushing, washing, sizing, or
19blending of aggregate materials.
20(e) “Manufacturer” does not include persons who are not
21commonly understood as manufacturers, including but not limited
22to persons engaged in any of the following activities:
23(i) Construction contracting.
24(ii) Repairing tangible personal property or real property.
25(iii) Providing health care.
26(iv) Farming, including cultivating agricultural products
27and raising livestock.
28(v) Transporting for hire.
29(vi) Making retail sales to consumers.
30 Sec. 150. Section 423.3, subsection 63, Code 2018, is
31amended to read as follows:
3263. The sales price from the sale of tangible personal
33property or services which will be given as prizes to players
34in games of skill, games of chance, raffles, and bingo games as
35defined in chapter 99B.
-69-1 Sec. 151. Section 423.3, subsection 78, paragraph a,
2unnumbered paragraph 1, Code 2018, is amended to read as
3follows:
4The sales price from sales or rental the sale of tangible
5personal property, or services rendered by any entity where
6the profits from the sales or rental sale of the tangible
7personal property, or services rendered, are used by or donated
8to a nonprofit entity that is exempt from federal income
9taxation pursuant to section 501(c)(3) of the Internal Revenue
10Code, a government entity, or a nonprofit private educational
11institution, and where the entire proceeds from the sales,
12rental, sale or services are expended for any of the following
13purposes:
14 Sec. 152. Section 423.3, subsection 79, Code 2018, is
15amended to read as follows:
1679. The sales price from the sale or rental of tangible
17personal property or from services furnished, to a recognized
18community action agency as provided in section 216A.93 to be
19used for the purposes of the agency.
20 Sec. 153. Section 423.3, Code 2018, is amended by adding the
21following new subsection:
22 NEW SUBSECTION. 103. The sales price from the sale of a
23grain bin or materials used to construct a grain bin. For
24purposes of this subsection, “grain bin” means property that is
25vented and covered with corrugated metal or similar material,
26and that is primarily used to hold loose grain for drying or
27storage.
28 Sec. 154. Section 423.4, subsection 3, unnumbered paragraph
291, Code 2018, is amended to read as follows:
30A relief agency may apply to the director for refund of the
31amount of sales or use tax imposed and paid upon sales to it of
32any goods, wares, merchandise, tangible personal property or
33services furnished, used for free distribution to the poor and
34needy.
35 Sec. 155. Section 423.4, subsection 3, paragraph a,
-70-1subparagraph (1), Code 2018, is amended to read as follows:
2(1) On forms furnished by the department, and filed within
3the time as the director shall provide by rule, the relief
4agency shall report to the department the total amount or
5amounts, valued in money, expended directly or indirectly
6for goods, wares, merchandise, tangible personal property or
7services furnished, used for free distribution to the poor and
8needy.
9 Sec. 156. Section 423.4, subsection 10, paragraph e, Code
102018, is amended to read as follows:
11e. There is established within the state treasury under the
12control of the department a baseball and softball complex sales
13tax rebate fund consisting of the amount of state sales tax
14revenues transferred pursuant to section 423.2, subsection 11,
15paragraph “b”, subparagraph (4) 423.2A, subsection 2, paragraph
16“d”. An account is created within the fund for each baseball
17and softball complex receiving an award under section 15F.207
18and meeting the qualifications of this subsection. Moneys
19in the fund shall only be used to provide rebates of state
20sales tax pursuant to this subsection, and only the state sales
21tax revenues in the baseball and softball complex rebate fund
22are subject to rebate under this subsection. The amount of
23rebates paid from each baseball and softball complex’s account
24within the fund shall not exceed the amount of the award under
25section 15F.207, and not more than five million dollars in
26total rebates shall be paid from the fund. Any moneys in the
27fund which represent state sales tax revenue for which the time
28period in paragraph “c” for receiving a rebate has expired,
29or which otherwise represent state sales tax revenue that has
30become ineligible for rebate pursuant to this subsection, shall
31immediately revert to the general fund of this state.
32 Sec. 157. Section 423.4, subsection 11, paragraph b,
33subparagraph (1), Code 2018, is amended to read as follows:
34(1) Sales tax imposed and collected by retailers upon
35sales of tangible personal property or services furnished to
-71-1purchasers at the raceway facility. Notwithstanding the state
2sales tax imposed in section 423.2, a sales tax rebate issued
3pursuant to this subparagraph shall not exceed the amounts
4transferred to the raceway facility tax rebate fund pursuant to
5section 423.2, subsection 11, paragraph “b”, subparagraph (7)
6 423.2A, subsection 2, paragraph “g”.
7 Sec. 158. Section 423.4, subsection 11, paragraph b,
8subparagraph (2), subparagraph division (c), Code 2018, is
9amended to read as follows:
10(c) Notwithstanding the state sales tax imposed in section
11423.2, a sales tax rebate issued pursuant to this subparagraph
12shall not exceed the amounts remaining after the transfers
13required under section 423.2, subsection 11, paragraph “b”,
14subparagraphs (1) through (6) 423.2A, subsection 2, paragraphs
15“a” through “f”, have been made from the total amount of sales
16tax for which the rebate is requested.
17 Sec. 159. Section 423.4, subsection 11, paragraph e, Code
182018, is amended to read as follows:
19e. There is established within the state treasury under
20the control of the department a raceway facility tax rebate
21fund consisting of the amount of state sales tax revenues
22transferred pursuant to section 423.2, subsection 11, paragraph
23“b”, subparagraph (7) 423.2A, subsection 2, paragraph “g”. An
24account is created within the fund for each raceway facility
25meeting the qualifications of this subsection. Moneys in the
26fund shall only be used to provide rebates of state sales tax
27pursuant to paragraph “b”, subparagraph (1). The total amount
28of rebates paid from the fund shall not exceed the amount
29specified in paragraph “c”, subparagraph (4), subparagraph
30division (a) or (b), whichever is applicable. Any moneys in
31the fund which represent state sales tax revenue for which the
32time period in paragraph “c” for receiving a rebate has expired,
33or which otherwise represent state sales tax revenue that has
34become ineligible for rebate pursuant to this subsection shall
35immediately revert to the general fund of the state.
-72-1 Sec. 160. Section 423.5, subsection 1, paragraph a, Code
22018, is amended to read as follows:
3a. The use in this state of tangible personal property
4as defined in section 423.1, including aircraft subject to
5registration under section 328.20, purchased for use in this
6state. For the purposes of this subchapter, the furnishing
7or use of the following services is also treated as the use
8of tangible personal property: optional service or warranty
9contracts, except residential service contracts regulated under
10chapter 523C, vulcanizing, recapping, or retreading services,
11engraving, photography, retouching, printing, or binding
12services, and communication service when furnished or delivered
13to consumers or users within this state.
14 Sec. 161. Section 423.14, subsection 2, paragraph b, Code
152018, is amended to read as follows:
16b. The tax upon the use of all tangible personal property
17other than that enumerated in paragraph “a”, which is sold by
18a seller who is a retailer maintaining a place of business
19in this state, or by such other retailer or agent as the
20director shall authorize pursuant to section 423.30 or its
21agent that is not otherwise required to collect sales tax under
22the provisions of this chapter, shall be collected by the
23retailer or agent and remitted to the department, pursuant to
24the provisions of paragraph “e”, and sections 423.24, 423.29,
25423.30, 423.32, and 423.33.
26 Sec. 162. NEW SECTION. 423.14A Persons required to collect
27sales and use tax — supplemental conditions, requirements, and
28responsibilities.
291. For purposes of this section, “Iowa sales” means sales of
30tangible personal property, services, or digital goods sourced
31to this state pursuant to section 423.15, 423.16, 423.17,
32423.19, or 423.20, or that are otherwise sold in this state or
33for delivery into this state.
342. In addition to and not in lieu of any application of
35this chapter to sellers who are retailers and sellers who are
-73-1retailers maintaining a place of business in this state, any
2person described in subsection 3, or the person’s agents,
3shall be considered a retailer in this state and a retailer
4maintaining a place of business in this state for purposes of
5this chapter on or after January 1, 2019, and shall be subject
6to all requirements of this chapter imposed on retailers and
7retailers maintaining a place of business in this state,
8including but not limited to the requirement to collect and
9remit sales and use taxes pursuant to sections 423.14 and
10423.29, and local option taxes under chapter 423B.
113. a. A retailer that has gross revenue from Iowa sales
12equal to or exceeding one hundred thousand dollars for the
13immediately preceding calendar year or the current calendar
14year.
15b. A retailer that makes Iowa sales in two hundred or more
16separate transactions for the immediately preceding calendar
17year or the current calendar year.
18c. (1) A retailer that owns, licenses, or uses software
19or data files that are installed or stored on property used
20in this state. For purposes of this subparagraph, “software
21or data files” include but are not limited to software that is
22affirmatively downloaded by a user, software that is downloaded
23as a result of the use of a website, preloaded software, and
24cookies.
25(2) A retailer that uses in-state software to make Iowa
26sales. For purposes of this subparagraph, “in-state software”
27means computer software that is stored on property located in
28this state or that is distributed within this state for the
29purpose of facilitating a sale by the retailer.
30(3) A retailer that provides, or enters into an agreement
31with another person to provide, a content distribution network
32in this state to facilitate, accelerate, or enhance the
33delivery of the retailer’s internet site to purchasers. For
34purposes of this subparagraph, “content distribution network”
35means a system of distributed servers that deliver internet
-74-1sites and other internet content to a user based on the
2geographic location of the user, the origin of the internet
3site or internet content, and a content delivery server.
4(4) This paragraph “c” shall not apply to a retailer that
5has gross revenue from Iowa sales of less than one hundred
6thousand dollars for the immediately preceding calendar year
7or the current calendar year.
8d. (1) A retailer that makes Iowa sales through a
9marketplace provider. This subparagraph shall not apply to a
10retailer that has gross revenue from Iowa sales of less than
11ten thousand dollars for the immediately preceding calendar
12year or the current calendar year.
13(2) A marketplace provider that makes or facilitates Iowa
14sales for one or more retailers equal to or exceeding one
15hundred thousand dollars, or in two hundred or more separate
16transactions, for the immediately preceding calendar year or
17the current calendar year.
18(3) Retailers and marketplace providers subject to this
19paragraph may enter into agreements regarding the fulfillment
20of the requirements of this chapter.
21(4) A marketplace provider shall collect sales and use tax
22on the entire sales price or purchase price paid by a purchaser
23on each Iowa sale made or facilitated by the marketplace
24provider that is subject to sales and use tax, regardless of
25the amount of the sales price or purchase price that will
26ultimately accrue to or benefit the marketplace provider,
27another retailer, or any other person. This sales and use tax
28collection responsibility of a marketplace provider applies but
29shall not be limited to sales facilitated through a computer
30software application, commonly referred to as in-app purchases,
31or through another digital good.
32(5) A marketplace provider shall be relieved of liability
33under this paragraph “d” for failure to collect and remit sales
34and use tax on an Iowa sale made or facilitated for a retailer
35under the following circumstances:
-75- 1(a) If the marketplace provider demonstrates to the
2satisfaction of the department that the failure to collect and
3remit the correct tax was due to incorrect or insufficient
4information provided to the marketplace provider by the
5retailer. This subparagraph division does not apply if a
6marketplace provider and a retailer are affiliates. For Iowa
7sales for which a marketplace provider is relieved of liability
8under this subparagraph division, the retailer or purchaser are
9solely liable for any amount of uncollected or unpaid tax.
10(b) (i) Subject to the limitation in subparagraph
11subdivision (ii), if the marketplace provider demonstrates
12to the satisfaction of the department that the Iowa sale was
13made or facilitated for a retailer prior to January 1, 2026,
14through a platform or other marketplace of the marketplace
15provider, that the marketplace provider and the retailer are
16not affiliates, and that the failure to collect sales and
17use tax was not due to an error in sourcing the sale. To the
18extent that a marketplace provider is relieved of liability
19for collection of sales and use tax under this subparagraph
20division, the retailer for whom the marketplace provider
21has made or facilitated the Iowa sale is also relieved of
22liability. The department may determine the manner in which
23a marketplace provider or retailer shall claim the liability
24relief provided in this subparagraph division.
25(ii) The liability relief provided in subparagraph
26subdivision (i) shall not exceed the following percentage
27of the total sales and use tax due on Iowa sales made or
28facilitated by a marketplace provider for retailers and sourced
29to this state during a calendar year:
30(A) For Iowa sales made or facilitated during the 2019
31calendar year, ten percent.
32(B) For Iowa sales made or facilitated during calendar years
332020 through 2024, five percent.
34(C) For Iowa sales made or facilitated during the 2025
35calendar year, three percent.
-76- 1(6) (a) For purposes of this paragraph, “marketplace
2provider” means a person who facilitates a retail sale by
3satisfying subparagraph divisions (i) and (ii) as follows:
4(i) The person directly or indirectly does any of the
5following:
6(A) Lists, makes available, or advertises tangible personal
7property, services, or digital goods for sale by a retailer in
8any forum.
9(B) Transmits or otherwise communicates an offer or
10acceptance of a retail sale of tangible personal property,
11services, or digital goods between a retailer and a purchaser.
12(C) Owns, rents, licenses, makes available, or operates
13any electronic or physical infrastructure or any property,
14process, method, copyright, trademark, or patent that connects
15retailers to purchasers for the purpose of making retail sales
16of tangible personal property, services, or digital goods.
17(D) Provides a platform or other marketplace for making
18retail sales of tangible personal property, services, or
19digital goods, or otherwise facilitates retail sales of
20tangible personal property, services, or digital goods,
21regardless of ownership or control of the tangible personal
22property, services, or digital goods that are the subject of
23the retail sale.
24(E) Provides software development or research and
25development activities related to any activity described in
26this subparagraph subdivision (i), if such software development
27or research and development activities are directly related
28to the physical or electronic marketplace provided by a
29marketplace provider.
30(F) Provides or offers fulfillment or storage services for
31a retailer.
32(G) Sets prices for a retailer’s sale of tangible personal
33property, services, or digital goods.
34(H) Provides or offers customer service to a retailer or
35a retailer’s customers, or accepts or assists with returns or
-77-1exchanges of tangible personal property, services, or digital
2goods sold by a retailer.
3(ii) The person directly or indirectly does any of the
4following:
5(A) Collects the sales price or purchase price of a retail
6sale of tangible personal property, services, or digital goods.
7(B) Provides payment processing services for a retail sale
8of tangible personal property, services, or digital goods.
9(C) Charges, collects, or otherwise receives selling fees,
10listing fees, referral fees, closing fees, fees for inserting
11or making available tangible personal property, services, or
12digital goods on a marketplace, or other consideration from the
13facilitation of a retail sale of tangible personal property,
14services, or digital goods, regardless of ownership or control
15of the tangible personal property, services, or digital goods
16that are the subject of the retail sale.
17(D) Through terms and conditions, agreements, or
18arrangements with a third party, collects payment in connection
19with a retail sale of tangible personal property, services,
20or digital goods from a purchaser and transmits that payment
21to the retailer, regardless of whether the person collecting
22and transmitting such payment receives compensation or other
23consideration in exchange for the service.
24(E) Provides a virtual currency that purchasers are allowed
25or required to use to purchase tangible personal property,
26services, or digital goods.
27(b) For purposes of this paragraph, “marketplace provider”
28includes but is not limited to a digital distribution service,
29digital distribution platform, online portal, or an application
30store.
31e. (1) A referrer if Iowa sales result from referrals from
32a platform of the referrer. A referrer is not required to
33collect and remit sales and use tax pursuant to this paragraph
34if the referrer does all of the following:
35(a) The referrer posts a conspicuous notice on each platform
-78-1of the referrer that includes all of the following:
2(i) A statement that sales or use tax is due on certain
3purchases.
4(ii) A statement that the retailer from whom the person is
5purchasing on the platform may not collect and remit sales and
6use tax on a purchase.
7(iii) A statement that Iowa requires the purchaser to pay
8sales or use tax and file sales or use tax returns if sales
9or use tax is not collected at the time of the sale by the
10retailer.
11(iv) Information informing the purchaser that the notice is
12provided under the requirements of this subparagraph.
13(v) Instructions for obtaining additional information from
14the department regarding whether and how to remit sales and use
15tax to the state of Iowa.
16(b) The referrer provides a monthly notice to each retailer
17to whom the referrer made a referral of a potential customer
18located in Iowa during the previous calendar year, which
19monthly notice shall contain all of the following:
20(i) A statement that Iowa imposes a sales or use tax on Iowa
21sales.
22(ii) A statement that a retailer making Iowa sales must
23collect and remit sales and use tax.
24(iii) Instructions for obtaining additional information
25from the department regarding the collection and remittance of
26Iowa sales and use tax.
27(c) The referrer provides the department with monthly
28reports in an electronic format and in the manner prescribed
29by the department, which monthly reports contain all of the
30following:
31(i) A list of retailers who received the referrer’s notice
32under subparagraph division (b).
33(ii) A list of retailers that collect and remit Iowa sales
34and use tax and that list or advertise the retailer’s products
35for sale on a platform of the referrer.
-79- 1(iii) An affidavit signed under penalty of perjury from
2an officer of the referrer affirming that the referrer made
3reasonable efforts to comply with the applicable sales and use
4tax notice and reporting requirements of this subparagraph.
5(2) For purposes of this paragraph:
6(a) “Platform” means an electronic or physical medium,
7including but not limited to an internet site or catalog,
8operated by a referrer.
9(b) “Referral” means the transfer through telephone,
10internet link, or other means by a referrer of a potential
11customer to a retailer who advertises or lists products for
12sale on a platform of the referrer.
13(c) (i) “Referrer” means a person who does all of the
14following:
15(A) Contracts or otherwise agrees with a retailer to list
16or advertise for sale a product of the retailer on a platform,
17provided such listing or advertisement identifies whether or
18not the retailer collects sales and use tax.
19(B) Receives a commission, fee, or other consideration from
20the retailer for the listing or advertisement.
21(C) Provides referrals to a retailer or an affiliate of the
22retailer.
23(D) Does not collect money or other consideration from the
24customer for the transaction.
25(ii) “Referrer” does not include a person primarily engaged
26in the business of printing or publishing a newspaper.
27f. (1) A retailer that makes Iowa sales through the use of
28a solicitor. For purposes of this paragraph, “solicitor” means
29a person that directly or indirectly solicits business for a
30retailer.
31(2) (a) A retailer is deemed to have a solicitor in
32this state if the retailer enters into an agreement with a
33resident under which the resident, for a commission, fee, or
34other similar consideration, directly or indirectly refers
35potential customers, whether by link on an internet site,
-80-1or otherwise, to the retailer. This determination may be
2rebutted by a showing of proof that the resident with whom the
3retailer has an agreement did not engage in any solicitation
4in this state on behalf of the retailer that would satisfy the
5nexus requirement of the United States Constitution during the
6calendar year in question.
7(b) This subparagraph (2) shall not apply to a retailer that
8has Iowa gross revenue from Iowa sales of ten thousand dollars
9or less for the immediately preceding calendar year or the
10current calendar year.
11(c) For purposes of this subparagraph (2):
12(i) “Iowa gross revenue” means gross revenue from Iowa
13sales to purchasers who were referred to the retailer by all
14solicitors who are residents.
15(ii) “Resident” includes an individual who is a resident
16of this state, as defined in section 422.4, and any business
17that owns any tangible or intangible property with a situs in
18this state, or that has one or more employees performing or
19providing services for the business in this state.
20(d) This paragraph “f” does not apply to chapter 422 and
21does not expand or contract the state’s jurisdiction to tax a
22trade or business under chapter 422.
23g. A retailer that owns, controls, rents, licenses, makes
24available, or uses any tangible or intangible property in this
25state or with a situs in this state, to make or otherwise
26facilitate a retail sale.
27h. (1) Any person that enters into a contract or agreement
28with a governmental entity, including but not limited to
29contracts for the provision of financial assistance or
30incentives such as a tax credit, forgivable loan, grant, tax
31rebate, or any other thing of value. For purposes of this
32subparagraph, “governmental entity” means any unit of government
33in the executive, legislative, or judicial branch, or any
34political subdivision of the state, including but not limited
35to a city, county, township, or school district.
-81- 1(2) Every bid submitted and each contract or agreement
2executed by a state agency shall contain a certification by
3the bidder or contractor stating that the bidder or contractor
4is registered with the department pursuant to this chapter
5and will collect and remit Iowa sales and use tax due under
6this chapter. In the certification, the bidder or contractor
7shall also acknowledge that the state agency may declare the
8contractor or bid void if the certification is false or becomes
9false. Fraudulent certification, by act or omission, may
10result in the state agency or its representative filing for
11damages for breach of contract.
12i. Any affiliate of any retailer that is required to collect
13and remit sales and use tax under this chapter, provided the
14affiliate makes retail sales.
15 Sec. 163. Section 423.15, unnumbered paragraph 1, Code
162018, is amended to read as follows:
17All sales of products tangible personal property or
18services, except those sales enumerated in section 423.16,
19shall be sourced according to this section by sellers
20obligated to collect Iowa sales and use tax. The sourcing
21rules described in this section apply to sales of tangible
22personal property, digital goods, and all services other than
23telecommunications services. This section only applies to
24determine a seller’s obligation to pay or collect and remit
25a Iowa sales or use tax with respect to the seller’s sale of
26a product. This section does not affect the obligation of a
27purchaser or lessee to remit tax on the use of the product to
28the taxing jurisdictions in which the use occurs. A seller’s
29obligation to collect Iowa sales tax or Iowa use tax only
30occurs if the sale is sourced to this state. Whether Iowa
31sales tax applies to a sale sourced to Iowa shall be determined
32based on the location at which the sale is consummated by
33delivery or, in the case of a service, where the first use of
34the service occurs made by a seller subject to section 423.1,
35subsection 48, or section 423.14A.
-82-1 Sec. 164. Section 423.15, subsection 1, paragraph e, Code
22018, is amended to read as follows:
3e. When paragraphs “a”, “b”, “c”, and “d” do not apply,
4including the circumstance where the seller is without
5sufficient information to apply the previous rules, then the
6location will be determined by the address from which tangible
7personal property was shipped, from which the digital good
8or the computer software delivered electronically was first
9available for transmission by the seller, or from which the
10service was provided disregarding for these purposes any
11location that merely provided the digital transfer of the
12product sold.
13 Sec. 165. Section 423.29, subsection 1, Code 2018, is
14amended to read as follows:
151. Every seller who is a retailer and who is making taxable
16sales of tangible personal property in Iowa shall, at the time
17of selling the property making the sale, collect the sales tax.
18Every seller who is a retailer maintaining a place of business
19in this state that is not otherwise required to collect sales
20tax under the provisions of this chapter and who is selling
21tangible personal property for use in Iowa shall, at the time
22of making the sale, whether within or without the state,
23collect the use tax. Sellers required to collect sales or use
24tax shall give to any purchaser a receipt for the tax collected
25in the manner and form prescribed by the director.
26 Sec. 166. Section 423.31, subsection 1, Code 2018, is
27amended to read as follows:
281. Each person subject to this section and section 423.36
29and in accordance with the provisions of this section and
30section 423.36 shall, on or before the last day of the month
31following the close of each calendar quarter during which
32such person is or has become or ceased being subject to the
33provisions of this section and section 423.36, make, sign, and
34file a return for the calendar quarter in the form as may be
35required. Returns shall show information relating to sales
-83-1prices including goods, wares, tangible personal property
2 and services converted to use of such person, the amounts of
3sales prices excluded and exempt from the tax, the amounts of
4sales prices subject to tax, a calculation of tax due, and
5any other information for the period covered by the return
6as may be required. Returns shall be signed by the retailer
7or the retailer’s authorized agent and must be certified by
8the retailer to be correct in accordance with forms and rules
9prescribed by the director.
10 Sec. 167. Section 423.31, subsection 5, paragraph a, Code
112018, is amended to read as follows:
12a. Upon making application and receiving approval from
13the director, a parent corporation person and its affiliated
14corporations affiliates that make retail sales of tangible
15personal property or taxable enumerated services may make
16deposits and file a consolidated sales tax return for the
17affiliated group, pursuant to rules adopted by the director. A
18parent corporation person and each affiliate corporation that
19files a consolidated return are jointly and severally liable
20for all tax, penalty, and interest found due for the tax period
21for which a consolidated return is filed or required to be
22filed.
23 Sec. 168. Section 423.33, subsection 3, Code 2018, is
24amended to read as follows:
253. Event sponsor’s liability for sales tax. A person
26sponsoring a flea market or a craft, antique, coin, or stamp
27show or similar event shall obtain from every retailer selling
28tangible personal property or taxable services at the event
29proof that the retailer possesses a valid sales tax permit or
30secure from the retailer a statement, taken in good faith,
31that tangible personalproperty or services offered for sale
32are not subject to sales tax. Failure to do so renders a
33sponsor of the event liable for payment of any sales tax,
34interest, and penalty due and owing from any retailer selling
35property or services at the event. Sections 423.31, 423.32,
-84-1423.37, 423.38, 423.39, 423.40, 423.41, and 423.42 apply to the
2sponsors. For purposes of this subsection, a “person sponsoring
3a flea market or a craft, antique, coin, or stamp show or similar
4event” does not include an organization which sponsors an
5event determined to qualify as an event involving casual sales
6pursuant to section 423.3, subsection 39, or the state fair or
7a fair as defined in section 174.1.
8 Sec. 169. Section 423.33, Code 2018, is amended by adding
9the following new subsection:
10 NEW SUBSECTION. 4. Liability of affiliates.
11a. Notwithstanding any other provision of law to the
12contrary, if any retailer required to collect and remit sales
13and use tax pursuant to sections 423.14, 423.14A, and 423.29,
14or any other provision of this chapter, fails to do so, all
15affiliates that directly, indirectly, or constructively control
16the retailer shall be jointly and severally liable for any tax,
17penalty, and interest under this chapter, regardless of whether
18the affiliate is a retailer.
19b. Pursuant to paragraph “a”, the department may elect
20to assess the full amount of any tax, penalty, and interest
21against the retailer, an affiliate of the retailer described
22in paragraph “a”, or any combination of the retailer and the
23retailer’s affiliates described in paragraph “a”.
24c. Notwithstanding any other provision of law to the
25contrary, the department has the discretion to deem an
26affiliate of a retailer an agent or alter ego of that retailer.
27d. Notwithstanding any other provision of law to the
28contrary, the department has the discretion to disregard or
29look through any organizational structure of an enterprise in
30order to assess and collect any tax, penalty, and interest
31against an affiliate that is acting to benefit an affiliate or
32an enterprise of which the affiliate is a part.
33 Sec. 170. Section 423.34, Code 2018, is amended to read as
34follows:
35423.34 Liability of user.
-85- 1Any person who uses any tangible personal property or
2services enumerated in section 423.2 upon which the use tax has
3not been paid, either to the county treasurer or to a retailer
4or direct to the department as required by this subchapter,
5shall be liable for the payment of tax, and shall on or before
6the last day of the month next succeeding each quarterly period
7pay the use tax upon all property or services used by the
8person during the preceding quarterly period in the manner and
9accompanied by such returns as the director shall prescribe.
10All of the provisions of sections 423.32 and 423.33 with
11reference to the returns and payments shall be applicable to
12the returns and payments required by this section.
13 Sec. 171. Section 423.57, Code 2018, is amended to read as
14follows:
15423.57 Statutes applicable.
16The director shall administer this subchapter as it relates
17to the taxes imposed in this chapter in the same manner and
18subject to all the provisions of, and all of the powers,
19duties, authority, and restrictions contained in sections
20423.14, 423.14A, 423.15, 423.16, 423.17, 423.19, 423.20,
21423.21, 423.22, 423.23, 423.24, 423.25, 423.29, 423.31, 423.32,
22423.33, 423.34, 423.34A, 423.35, 423.37, 423.38, 423.39,
23423.40, 423.41, and 423.42, section 423.43, subsection 1, and
24sections 423.45, 423.46, and 423.47.
25 Sec. 172. Section 423.58, Code 2018, is amended to read as
26follows:
27423.58 Collection, permit, and tax return exemption for
28certain out-of-state businesses.
29Notwithstanding sections 423.14, 423.14A, 423.29, 423.31,
30423.32, and 423.36, a person meeting the requirements of
31section 29C.24 is not required to obtain a sales or use tax
32permit, collect and remit sales and use tax, or make and file
33applicable sales or use tax returns, as provided in section
3429C.24, subsection 3, paragraph “a”, subparagraph (2).
35 Sec. 173. Section 423B.5, subsection 1, Code 2018, is
-86-1amended to read as follows:
21. A local sales and services tax at the rate of not more
3than one percent may be imposed by a county on the sales price
4taxed by the state under chapter 423, subchapter II. A local
5sales and services tax shall be imposed on the same basis as
6the state sales and services tax or in the case of the use of
7natural gas, natural gas service, electricity, or electric
8service on the same basis as the state use tax and shall not
9be imposed on the sale of any property or on any service not
10taxed by the state, except the tax shall not be imposed on
11the sales price from the sale of motor fuel or special fuel
12as defined in chapter 452A which is consumed for highway use
13or in watercraft or aircraft if the fuel tax is paid on the
14transaction and a refund has not or will not be allowed,
15on the sales price from the sale of equipment by the state
16department of transportation, or on the sales price from the
17sale or use of natural gas, natural gas service, electricity,
18or electric service in a city or county where the sales price
19from the sale of natural gas or electric energy is subject to
20a franchise fee or user fee during the period the franchise
21or user fee is imposed. A local sales and services tax is
22applicable to transactions within those incorporated and
23unincorporated areas of the county where it is imposed and,
24which transactions include but are not limited to sales sourced
25pursuant to sections 423.15, 423.17, 423.19, or 423.20, to a
26location within that incorporated or unincorporated area of the
27county. The tax shall be collected by all persons required
28to collect state sales taxes. All cities contiguous to each
29other shall be treated as part of one incorporated area and the
30tax would be imposed in each of those contiguous cities only
31if the majority of those voting in the total area covered by
32the contiguous cities favors its imposition. In the case of a
33local sales and services tax submitted to the registered voters
34of two or more contiguous counties as provided in section
35423B.1, subsection 4, paragraph “c”, all cities contiguous to
-87-1each other shall be treated as part of one incorporated area,
2even if the corporate boundaries of one or more of the cities
3include areas of more than one county, and the tax shall be
4imposed in each of those contiguous cities only if a majority
5of those voting on the tax in the total area covered by the
6contiguous cities favored its imposition.
7 Sec. 174. Section 423B.6, subsection 2, paragraph b, Code
82018, is amended to read as follows:
9b. The ordinance of a county board of supervisors imposing
10a local sales and services tax shall adopt by reference the
11applicable provisions of the appropriate sections of chapter
12423. All powers and requirements of the director to administer
13the state sales tax law and use tax law are applicable to the
14administration of a local sales and services tax law and the
15local excise tax, including but not limited to the provisions
16of section 422.25, subsection 4, sections 422.30, 422.67,
17and 422.68, section 422.69, subsection 1, sections 422.70
18through 422.75, section 423.14, subsection 1 and subsection
192, paragraphs “b” through “e”, and sections 423.14A, 423.15,
20423.23, 423.24, 423.25, 423.31 through 423.35, 423.37 through
21423.42, 423.46, and 423.47. Local officials shall confer
22with the director of revenue for assistance in drafting the
23ordinance imposing a local sales and services tax. A certified
24copy of the ordinance shall be filed with the director as soon
25as possible after passage.
26 Sec. 175. LEGISLATIVE INTENT. It is the intent of the
27general assembly that the provisions of this division of this
28Act amending the definition of “place of business” in section
29423.1, subsection 37, and “sales” in section 423.1, subsection
3050, enacting definitions of “sold at retail in the state” in
31section 423.1, subsection 55A, and “subscription” in section
32423.1, subsection 57A, are conforming amendments consistent
33with current state law, and that the amendments do not change
34the application of current law but instead reflect current law
35both before and after the enactment of this division of this
-88-1Act.
2 Sec. 176. EFFECTIVE DATE.
31. Except as provided in subsection 2, this division of this
4Act takes effect January 1, 2019.
52. The following take effect July 1, 2018:
6a. The sections of this division of this Act amending
7section 423.1, subsections 37 and 50.
8b. The sections of this division of this Act enacting
9section 423.1, subsections 55A and 57A.
10c. The section of this division of this Act amending section
11423.2, subsection 1, paragraph “a”, subparagraph (1).
12d. The provisions adding photography and retouching to the
13list of enumerated services subject to the sales tax in the
14section of this division of this Act amending section 423.2,
15subsection 6.
16e. The section of this division of this Act enacting section
17423.2, subsection 8, paragraph “d”.
18f. The section of this division of this Act amending section
19423.5, subsection 1, paragraph “a”.
20g. The section of this division of this Act entitled
21“legislative intent” which describes the intent of the general
22assembly with respect to certain amendments in this division of
23this Act to the definition of “place of business” in section
24423.1, subsection 37, “sales” in section 423.1, subsection 50,
25the enactment of a definition for “subscription” in section
26423.1, subsection 57A, and “sold at retail” in section 423.1,
27subsection 55A.
28DIVISION VII
29HOTEL AND MOTEL EXCISE TAX AND AUTOMOBILE RENTAL EXCISE TAX
30CHANGES
31 Sec. 177. Section 423A.2, subsection 1, Code 2018, is
32amended to read as follows:
331. For the purposes of this chapter, unless the context
34otherwise requires:
35a. “Department” means the department of revenue.
-89- 1b. “Lessor” means any of the following:
2(1) Aperson engaged in the business of renting lodging to
3users.
4(2) A person who acquires a right to or interest in any
5lodging with an intent to rent the lodging to another person.
6(3) A person who actually or constructively rents lodging,
7regardless of who owns or controls the lodging.
8(4) A lodging facilitator.
9(5) A retailer or retailer maintaining a place of business
10in this state as defined in section 423.1, including those
11persons who meet the requirements of section 423.14A, which
12retailer or retailer maintaining a place of business in this
13state would be responsible for collection and payment of the
14hotel and motel tax if it were a sales or use tax under chapter
15423.
16c. “Lodging” means rooms, apartments, or sleeping quarters
17in a hotel, motel, inn, public lodging house, rooming house,
18cabin, apartment, residential property, or manufactured or
19mobile home which is tangible personal property, or in a
20tourist court, or in any place where sleeping accommodations
21are furnished to transient guests for rent, whether with or
22without meals. Lodging does not include rooms that are not
23used for sleeping accommodations.
24d. “Lodging facilitator” means any person who facilitates
25the renting of lodging to users by satisfying subparagraphs (1)
26and (2) as follows:
27(1) The person directly or indirectly does any of the
28following:
29(a) Lists, makes available, or advertises lodging for rent
30by a lessor in any forum.
31(b) Transmits or otherwise communicates an offer or
32acceptance between a lessor or user.
33(c) Owns, rents, licenses, makes available, or operates any
34electronic or physical infrastructure or any property, process,
35method, copyright, trademark, or patent that connects lessors
-90-1and users to each other.
2(d) Provides a platform or other marketplace for renting
3lodging or otherwise facilitates the renting of lodging,
4regardless of ownership or control of the lodging.
5(e) Provides software development or research and
6development activities related to any activity described in
7this subparagraph (1), if such software development or research
8and development activities are directly related to the physical
9or electronic marketplace provided by a lodging facilitator.
10(f) Provides or offers fulfillment or storage services for a
11lessor.
12(g) Sets prices for a lessor’s rental of lodging.
13(h) Provides or offers customer service to a lessor or
14a lessor’s customers, or accepts or assists with returns,
15exchanges, cancellations, or rescheduling of the rental of
16lodging by a lessor.
17(2) The person directly or indirectly does any of the
18following:
19(a) Collects the sales price for the renting of the lodging.
20(b) Provides payment processing services for the renting of
21lodging.
22(c) Charges, collects, or otherwise receives booking fees,
23advertising revenues, or other consideration from the renting
24of lodging or the facilitation of the renting of lodging,
25regardless of ownership or control of the lodging.
26(d) Through terms and conditions, agreements, or
27arrangements with a third party, collects payment in connection
28with a rental of lodging from a user and transmits that payment
29to the lessor, regardless of whether the person collecting
30and transmitting such payment receives compensation or other
31consideration in exchange for the service.
32(e) Provides a virtual currency that users are allowed or
33required to use to rent lodging.
34d. e. “Person” means the same as the term is defined in
35section 423.1.
-91- 1e. f. “Renting”, “rental”, or “rent” means a transfer of
2possession or control of lodging for a fixed or indeterminate
3term for consideration and includes any kind of direct or
4indirect charge for such lodging or its use.
5f. g. “Sales price” means the consideration for renting of
6lodging and means the same as the term is defined in section
7423.1 all direct or indirect consideration, including but
8not limited to cash, credit, property, and services, paid in
9connection with any charge of any description associated with
10the renting of lodging or with communicating, negotiating,
11reserving, booking, facilitating, or otherwise arranging to
12rent lodging, including but not limited to booking fees,
13reservation fees, service fees, cleaning fees, linen fees,
14towel fees, and nonrefundable deposits. When determining “sales
15price”, no deduction shall be taken for any of the following:
16(1) The lessor’s cost of the property rented.
17(2) The cost of materials used, labor or service cost,
18interest, losses, all costs of transportation to the lessor,
19all taxes imposed on the lessor, or any other expenses of the
20lessor.
21(3) Charges by the lessor for any services necessary to
22complete the rental transaction.
23g. h. “User” means a person to whom lodging is rented.
24 Sec. 178. NEW SECTION. 423A.3A Collection and remittance by
25lodging facilitators — joint and several liability.
26If a transaction for the rental of lodging involves both a
27lodging facilitator and another lessor, all of the following
28shall apply:
291. The lodging facilitator shall collect the state-imposed
30tax under section 423A.3 and the locally imposed tax under
31section 423A.4 on the entire sales price paid by the user,
32regardless of the amount of the sales price that will
33ultimately accrue to or benefit the lodging facilitator,
34another lessor, or any other person.
352. The lodging facilitator and any other lessor involved
-92-1in the transaction shall be jointly and severally liable for
2collecting and remitting the tax under sections 423A.3 and
3423A.4.
4 Sec. 179. Section 423A.5, Code 2018, is amended to read as
5follows:
6423A.5 Exemptions.
71. There are exempted from the provisions of this chapter
8and from the computation of any amount of tax imposed by
9section 423A.3 this chapter all of the following:
10a. 1. The sales price from the renting of lodging which is
11rented by the same person for a period of more than thirty-one
12consecutive days.
13b. 2. The sales price from the renting of sleeping rooms
14in dormitories and in memorial unions at all universities and
15colleges located in the state of Iowa.
162. There is exempted from the provisions of this chapter and
17from the computation of any amount of tax imposed by section
18423A.4 all of the following:
19a. The sales price from the renting of lodging or rooms
20exempt under subsection 1.
21b. 3. The sales price of lodging furnished to the guests of
22a religious institution if the property is exempt under section
23427.1, subsection 8, and the purpose of renting is to provide a
24place for a religious retreat or function and not a place for
25transient guests generally.
26 Sec. 180. Section 423A.6, subsection 4, Code 2018, is
27amended to read as follows:
284. Section 422.25, subsection 4, sections 422.30, 422.67,
29and 422.68, section 422.69, subsection 1, sections 422.70,
30422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
311, and sections 423.23, 423.24, 423.25, 423.31, 423.33,
32423.35, 423.37 through 423.42, and 423.47, consistent with the
33provisions of this chapter, apply with respect to the taxes
34authorized under this chapter, in the same manner and with the
35same effect as if the state and local hotel and motel taxes
-93-1were retail sales taxes within the meaning of those statutes.
2Notwithstanding this subsection, the director shall provide for
3quarterly filing of returns and for other than quarterly filing
4of returns both as prescribed in section 423.31. The director
5may require all persons who are engaged in the business of
6deriving any sales price subject to tax under this chapter to
7register with the department. All taxes collected under this
8chapter by a retailer, lessor, or any individual other person
9 are deemed to be held in trust for the state of Iowa and the
10local jurisdictions imposing the taxes.
11 Sec. 181. Section 423C.2, subsection 3, Code 2018, is
12amended to read as follows:
133. “Lessor” means a any of the following:
14a. Aperson engaged in the business of renting automobiles
15to users. “Lessor” includes a
16b. Amotor vehicle dealer licensed pursuant to chapter
17322 who rents automobiles to users. For this purpose, the
18objective of making a profit is not necessary to make the
19renting activity a business.
20c. A person who acquires a right to or interest in any
21automobile with an intent to rent the automobile to another
22person.
23d. A person who actually or constructively rents
24automobiles, regardless of who owns or controls the
25automobiles.
26e. A rental facilitator.
27f. A retailer or retailer maintaining a place of business in
28this state as defined in section 423.1, including those persons
29who meet the requirements of section 423.14A, which retailer or
30retailer maintaining a place of business in this state would be
31responsible for collection and payment of the automobile rental
32excise tax if it were a sales or use tax under chapter 423.
33 Sec. 182. Section 423C.2, Code 2018, is amended by adding
34the following new subsection:
35 NEW SUBSECTION. 06. “Rental facilitator” means any person
-94-1who facilitates the renting of an automobile to users by
2satisfying paragraphs “a” and “b” as follows:
3a. The person directly or indirectly does any of the
4following:
5(1) Lists, makes available, or advertises automobiles for
6rent by a lessor in any forum.
7(2) Transmits or otherwise communicates an offer or
8acceptance between a lessor or user.
9(3) Owns, rents, licenses, makes available, or operates any
10electronic or physical infrastructure or any property, process,
11method, copyright, trademark, or patent that connects lessors
12and users to each other.
13(4) Provides a platform or other marketplace for
14renting automobiles or otherwise facilitates the renting
15of automobiles, regardless of ownership or control of the
16automobile.
17(5) Provides software development or research and
18development activities related to any activity described in
19this paragraph “a”, if such software development or research and
20development activities are directly related to the physical or
21electronic marketplace provided by a rental facilitator.
22(6) Provides or offers fulfillment or storage services for a
23lessor.
24(7) Sets prices for a lessor’s rental of automobiles.
25(8) Provides or offers customer service to a lessor or
26a lessor’s customers, or accepts or assists with returns,
27exchanges, cancellations, or rescheduling of the rental of
28automobiles by a lessor.
29b. The person directly or indirectly does any of the
30following:
31(1) Collects the rental price for the renting of an
32automobile.
33(2) Provides payment processing services for the renting of
34an automobile.
35(3) Charges, collects, or otherwise receives booking
-95-1fees, advertising revenues, or other consideration from the
2renting of an automobile or the facilitation of the renting
3of an automobile, regardless of ownership or control of the
4automobile.
5(4) Through terms and conditions, agreements, or
6arrangements with a third party, collects payment in connection
7with a rental of automobiles from a user and transmits that
8payment to the lessor, regardless of whether the person
9collecting and transmitting such payment receives compensation
10or other consideration in exchange for the service.
11(5) Provides a virtual currency that users are allowed or
12required to use to rent automobiles.
13 Sec. 183. Section 423C.2, subsection 6, Code 2018, is
14amended by striking the subsection and inserting in lieu
15thereof the following:
166. “Rental price” means all direct or indirect
17consideration, including but not limited to cash, credit,
18property, and services, paid in connection with any charge of
19any description associated with the renting of an automobile
20or with communicating, negotiating, reserving, booking,
21facilitating, or otherwise arranging to rent an automobile,
22including but not limited to booking fees, reservation fees,
23service fees, and nonrefundable deposits. When determining
24“rental price”, no deduction shall be taken for any of the
25following:
26a. The lessor’s cost of the property rented.
27b. The cost of materials used, labor or service cost,
28interest, losses, all costs of transportation to the lessor,
29all taxes imposed on the lessor, or any other expenses of the
30lessor.
31c. Charges by the lessor for any services necessary to
32complete the rental transaction.
33 Sec. 184. NEW SECTION. 423C.3A Collection and remittance by
34rental facilitators — joint and several liability.
35If a transaction for the rental of an automobile involves
-96-1both a rental facilitator and another lessor, all of the
2following shall apply:
31. The rental facilitator shall collect the tax under
4section 423C.3 on the entire rental price paid by the user,
5regardless of the amount of the rental price that will
6ultimately accrue to or benefit the rental facilitator, another
7lessor, or any other person.
82. The rental facilitator and any other lessor involved
9in the transaction shall be jointly and severally liable for
10collecting and remitting the tax under section 423C.3.
11 Sec. 185. LEGISLATIVE INTENT. It is the intent of the
12general assembly that the provision of this division of this
13Act amending the definition of “lodging” in section 423A.2,
14subsection 1, paragraph “c”, is a conforming amendment
15consistent with current state law, and that the amendment
16does not change the application of current law but instead
17reflects current law both before and after the enactment of
18this division of this Act.
19 Sec. 186. EFFECTIVE DATE.
201. Except as provided in subsection 2, this division of this
21Act takes effect January 1, 2019.
222. The following take effect July 1, 2018:
23a. The provision amending the definition of “lodging” in the
24section of this division of this Act amending section 423A.2,
25subsection 1, paragraph “c”.
26b. The section of this division of this Act entitled
27“legislative intent” which describes the intent of the general
28assembly with respect to the amendment in this division of
29this Act to the definition of “lodging” in section 423A.2,
30subsection 1, paragraph “c”.
31<DIVISION VIII
32MISCELLANEOUS TAX PROVISIONS
33 Sec. 187. NEW SECTION. 421.71 Class actions — implied
34right of action — private cause of action immunity.
351. Class actions prohibited. No class action may be brought
-97-1against the department, a taxpayer, or a person required to
2collect any tax imposed under this title, in any court, agency,
3or other adjudicative body, or in any other forum, based on
4any act or omission arising from or related to any provision
5of this title.
62. No implied right of action. Nothing in this Title shall
7be construed as creating or providing an implied private right
8of action or any private common law claim against any taxpayer,
9or against any person required to collect any tax imposed under
10this Title, in any court, agency, or other adjudicative body,
11or in any other forum. This subsection shall not apply to or
12otherwise limit any claim, action, mandate, power, remedy, or
13discretion of the department, or an agent or designee of the
14department.
153. Private cause of action immunity for overpayment of
16certain taxes.
17a. A taxpayer, or any person required to collect taxes
18imposed under chapters 423, 423A, 423B, 423C, and 423D, and
19chapter 423G, as enacted in 2018 Iowa Acts, Senate File 512,
20shall be immune from any private cause of action arising from
21or related to the overpayment of taxes imposed under chapters
22423, 423A, 423B, 423C, and 423D, and chapter 423G, as enacted
23in 2018 Iowa Acts, Senate File 512, that are collected and
24remitted to the department.
25b. Nothing in this subsection shall apply to or otherwise
26limit any of the following:
27(1) Any claim, action, mandate, power, remedy, or
28discretion of the department, or an agent or designee of the
29department.
30(2) A taxpayer’s right to seek a refund from the department
31related to taxes imposed under chapters 423, 423A, 423B,
32423C, and 423D, and chapter 423G, as enacted in 2018 Iowa
33Acts, Senate File 512, that are collected from or paid by the
34taxpayer.
35 Sec. 188. EFFECTIVE DATE. This division of this Act, being
-98-1deemed of immediate importance, takes effect upon enactment.>
mm/jh/jh
2modifying the individual and corporate income taxes, the
3franchise tax, tax credits, the moneys and credits tax,
4the sales and use taxes and local option sales tax, the
5hotel and motel excise tax, the automobile rental excise
6tax, the Iowa educational savings plan trust, and the
7disabilities expenses savings plan trust, providing for
8other properly related matters, making penalties applicable,
9and including immediate effective date and retroactive and
10other applicability provisions.
11BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2INCOME TAX CHANGES FOR TAX YEAR 2018
3 Section 1. EARNED INCOME TAX CREDIT FOR 2018.
4Notwithstanding the definition of “Internal Revenue Code”
5in section 422.3, for tax years beginning during the 2018
6calendar year, any reference to the term “Internal Revenue
7Code” in section 422.12B shall mean the Internal Revenue Code
8of 1954, prior to the date of its redesignation as the Internal
9Revenue Code of 1986 by the Tax Reform Act of 1986, or means
10the Internal Revenue Code of 1986 as amended and in effect on
11January 1, 2016, but shall not be construed to include any
12amendment to the Internal Revenue Code enacted after January 1,
132016, including any amendment with retroactive applicability
14or effectiveness.
15 Sec. 2. ACCOUNTING METHOD AND OTHER MISCELLANEOUS
16COUPLING PROVISIONS FOR TAX YEAR 2018. Notwithstanding any
17other provision of law to the contrary, amendments to the
18Internal Revenue Code enacted in Pub.L. No.115-97, §13102,
19§13221, §13504, §13541, §13543, §13611, and §13613, apply in
20calculating federal adjusted gross income or federal taxable
21income, as applicable, for state tax purposes for purposes of
22chapter 422 for tax years beginning during the 2018 calendar
23year to the extent those amendments affect the calculation of
24federal adjusted gross income or federal taxable income, as
25applicable, for federal tax purposes for tax years beginning
26during the 2018 calendar year.
27 Sec. 3. TEACHER EXPENSE DEDUCTION. Notwithstanding any
28other provision of law to the contrary, for tax years beginning
29during the 2018 calendar year, a taxpayer is allowed to take
30the deduction for certain expenses of elementary and secondary
31school teachers allowed under section 62(a)(2)(D) of the
32Internal Revenue Code, as amended by Pub.L. No.114-113,
33division Q, §104, in computing net income for state tax
34purposes.
35 Sec. 4. EFFECTIVE DATE. This division of this Act, being
-1-1deemed of immediate importance, takes effect upon enactment.
2 Sec. 5. RETROACTIVE APPLICABILITY. This division of this
3Act applies retroactively to January 1, 2018, for tax years
4beginning on or after that date, but before January 1, 2019.
5DIVISION II
6INCOME TAX AND FRANCHISE TAX CHANGES BEGINNING IN 2019
7 Sec. 6. Section 217.39, Code 2018, is amended to read as
8follows:
9217.39 Persecuted victims of World War II — reparations —
10heirs.
11Notwithstanding any other law of this state, payments paid
12to and income from lost property of a victim of persecution
13for racial, ethnic, or religious reasons by Nazi Germany or
14any other Axis regime or as an heir of such victim which is
15exempt from state income tax as provided described in section
16422.7, subsection 35, Code 2018, shall not be considered as
17income or an asset for determining the eligibility for state or
18local government benefit or entitlement programs. The proceeds
19are not subject to recoupment for the receipt of governmental
20benefits or entitlements, and liens, except liens for child
21support, are not enforceable against these sums for any reason.
22 Sec. 7. Section 422.3, subsection 5, Code 2018, is amended
23to read as follows:
245. “Internal Revenue Code” means the Internal Revenue Code
25of 1954, prior to the date of its redesignation as the Internal
26Revenue Code of 1986 by the Tax Reform Act of 1986, or means
27the Internal Revenue Code of 1986, as amended and in effect
28on January 1, 2015. This definition shall not be construed
29to include any amendment to the Internal Revenue Code enacted
30after the date specified in the preceding sentence, including
31any amendment with retroactive applicability or effectiveness.
32 Sec. 8. Section 422.4, subsection 1, paragraphs b and c,
33Code 2018, are amended to read as follows:
34b. “Cumulative inflation factor” means the product of the
35annual inflation factor for the 1988 2022 calendar year and
-2-1all annual inflation factors for subsequent calendar years
2as determined pursuant to this subsection. The cumulative
3inflation factor applies to all tax years beginning on or after
4January 1 of the calendar year for which the latest annual
5inflation factor has been determined.
6c. The annual inflation factor for the 1988 2022 calendar
7year is one hundred percent.
8 Sec. 9. Section 422.4, subsection 2, Code 2018, is amended
9by striking the subsection.
10 Sec. 10. Section 422.4, subsection 16, Code 2018, is amended
11to read as follows:
1216. The words “taxable income” mean the net income as
13defined in section 422.7 minus the deductions deduction allowed
14by section 422.9, if available, in the case of individuals;
15in the case of estates or trusts, the words “taxable income”
16mean the taxable income (without a deduction for personal
17exemption) as computed for federal income tax purposes under
18the Internal Revenue Code, but with the adjustments specified
19in section 422.7 plus the Iowa income tax deducted in computing
20the federal taxable income and minus federal income taxes as
21provided in section 422.9.
22 Sec. 11. Section 422.5, subsection 1, paragraphs a, b, c, d,
23and e, Code 2018, are amended by striking the paragraphs and
24inserting in lieu thereof the following:
25a. On all taxable income from zero through twelve thousand
26dollars in the case of a married couple filing jointly, or from
27zero to six thousand dollars in the case of all other persons,
28five percent.
29b. On all taxable income exceeding twelve thousand dollars
30but not exceeding thirty thousand dollars in the case of a
31married couple filing jointly, or exceeding six thousand
32dollars but not exceeding fifteen thousand dollars in the case
33of all other persons, five and one-quarter percent.
34c. On all taxable income exceeding thirty thousand dollars
35but not exceeding sixty thousand dollars in the case of a
-3-1married couple filing jointly, or exceeding fifteen thousand
2dollars but not exceeding thirty thousand dollars in the case
3of all other persons, five and one-half percent.
4d. On all taxable income exceeding sixty thousand dollars
5but not exceeding one hundred fifty thousand dollars in the
6case of a married couple filing jointly, or exceeding thirty
7thousand dollars but not exceeding seventy-five thousand
8dollars in the case of all other persons, six percent.
9e. On all taxable income exceeding one hundred fifty
10thousand dollars in the case of a married couple filing
11jointly, or exceeding seventy-five thousand dollars in the case
12of all other persons, the following:
13(1) Six and six-tenths percent for tax years beginning
14during the 2019 calendar year.
15(2) Six and one-half percent for tax years beginning during
16the 2020 calendar year.
17(3) Six and four-tenths percent for tax years beginning
18during the 2021 calendar year.
19(4) Six and three-tenths percent for tax years beginning on
20or after January 1, 2022.
21 Sec. 12. Section 422.5, subsection 1, paragraphs f, g, h,
22and i, Code 2018, are amended by striking the paragraphs.
23 Sec. 13. Section 422.5, subsection 1, paragraph j, Code
242018, is amended to read as follows:
25j. (1) The tax imposed upon the taxable income of a
26nonresident shall be computed by reducing the amount determined
27pursuant to paragraphs “a” through “i” “e” by the amounts of
28nonrefundable credits under this division and by multiplying
29this resulting amount by a fraction of which the nonresident’s
30net income allocated to Iowa, as determined in section
31422.8, subsection 2, paragraph “a”, is the numerator and the
32nonresident’s total net income computed under section 422.7 is
33the denominator. This provision also applies to individuals
34who are residents of Iowa for less than the entire tax year.
35(2) (a) The tax imposed upon the taxable income of a
-4-1resident shareholder in an S corporation or of an estate
2or trust with a situs in Iowa that is a shareholder in an S
3corporation, which S corporation has in effect for the tax
4year an election under subchapter S of the Internal Revenue
5Code and carries on business within and without the state,
6may be computed by reducing the amount determined pursuant to
7paragraphs “a” through “i” “e” by the amounts of nonrefundable
8credits under this division and by multiplying this resulting
9amount by a fraction of which the resident’s or estate’s
10or trust’s net income allocated to Iowa, as determined in
11section 422.8, subsection 2, paragraph “b”, is the numerator
12and the resident’s or estate’s or trust’s total net income
13computed under section 422.7 is the denominator. If a resident
14shareholder, or an estate or trust with a situs in Iowa
15that is a shareholder, has elected to take advantage of this
16subparagraph (2), and for the next tax year elects not to take
17advantage of this subparagraph, the resident or estate or
18trust shareholder shall not reelect to take advantage of this
19subparagraph for the three tax years immediately following the
20first tax year for which the shareholder elected not to take
21advantage of this subparagraph, unless the director consents to
22the reelection. This subparagraph also applies to individuals
23who are residents of Iowa for less than the entire tax year.
24(b) This subparagraph (2) shall not affect the amount of
25the taxpayer’s checkoffs under this division, the credits from
26tax provided under this division, and the allocation of these
27credits between spouses if the taxpayers filed separate returns
28or separately on combined returns.
29 Sec. 14. Section 422.5, subsection 2, Code 2018, is amended
30by striking the subsection.
31 Sec. 15. Section 422.5, subsections 3 and 3B, Code 2018, are
32amended to read as follows:
333. a. The tax shall not be imposed on a resident or
34nonresident whose net income, as defined in section 422.7, is
35thirteen thousand five hundred dollars or less in the case
-5-1of married persons filing jointly or filing separately on a
2combined return, heads of household, and surviving spouses or
3nine thousand dollars or less in the case of all other persons;
4but in the event that the payment of tax under this division
5would reduce the net income to less than thirteen thousand five
6hundred dollars or nine thousand dollars as applicable, then
7the tax shall be reduced to that amount which would result
8in allowing the taxpayer to retain a net income of thirteen
9thousand five hundred dollars or nine thousand dollars as
10applicable. The preceding sentence does not apply to estates
11or trusts. For the purpose of this subsection, the entire net
12income, including any part of the net income not allocated
13to Iowa, shall be taken into account. For purposes of this
14subsection, net income includes all amounts of pensions or
15other retirement income, except for military retirement pay
16excluded under section 422.7, subsection 31A, paragraph “a”,
17or section 422.7, subsection 31B, paragraph “a”, received from
18any source which is not taxable under this division as a result
19of the government pension exclusions in section 422.7, or any
20other state law. If the combined net income of a husband and
21wife exceeds thirteen thousand five hundred dollars, neither
22of them shall receive the benefit of this subsection, and it
23is immaterial whether they file a joint return or separate
24returns. However, if a husband and wife file separate returns
25and have a combined net income of thirteen thousand five
26hundred dollars or less, neither spouse shall receive the
27benefit of this paragraph, if one spouse has a net operating
28loss and elects to carry back or carry forward the loss as
29provided under the Internal Revenue Code or in section 422.9,
30subsection 3. A person who is claimed as a dependent by
31another person as defined in section 422.12 shall not receive
32the benefit of this subsection if the person claiming the
33dependent has net income exceeding thirteen thousand five
34hundred dollars or nine thousand dollars as applicable or the
35person claiming the dependent and the person’s spouse have
-6-1combined net income exceeding thirteen thousand five hundred
2dollars or nine thousand dollars as applicable.
3b. In lieu of the computation in subsection 1 or 2, or in
4paragraph “a” of this subsection, if the married persons’,
5 filing jointly or filing separately on a combined return,
6head of household’s, or surviving spouse’s net income exceeds
7thirteen thousand five hundred dollars, the regular tax imposed
8under this division shall be the lesser of the maximum state
9individual income tax rate for the tax year times the portion
10of the net income in excess of thirteen thousand five hundred
11dollars or the regular tax liability computed without regard
12to this sentence. Taxpayers electing to file separately shall
13compute the alternate tax described in this paragraph using the
14total net income of the husband and wife. The alternate tax
15described in this paragraph does not apply if one spouse elects
16to carry back or carry forward the loss as provided under the
17Internal Revenue Code or in section 422.9, subsection 3.
183B. a. The tax shall not be imposed on a resident or
19nonresident who is at least sixty-five years old on December
2031 of the tax year and whose net income, as defined in section
21422.7, is thirty-two thousand dollars or less in the case
22of married persons filing jointly or filing separately on a
23combined return, heads of household, and surviving spouses or
24twenty-four thousand dollars or less in the case of all other
25persons; but in the event that the payment of tax under this
26division would reduce the net income to less than thirty-two
27thousand dollars or twenty-four thousand dollars as applicable,
28then the tax shall be reduced to that amount which would result
29in allowing the taxpayer to retain a net income of thirty-two
30thousand dollars or twenty-four thousand dollars as applicable.
31The preceding sentence does not apply to estates or trusts.
32For the purpose of this subsection, the entire net income,
33including any part of the net income not allocated to Iowa,
34shall be taken into account. For purposes of this subsection,
35net income includes all amounts of pensions or other retirement
-7-1income, except for military retirement pay excluded under
2section 422.7, subsection 31A, paragraph “a”, or section 422.7,
3subsection 31B, paragraph “a”, received from any source which is
4not taxable under this division as a result of the government
5pension exclusions in section 422.7, or any other state law.
6If the combined net income of a husband and wife exceeds
7thirty-two thousand dollars, neither of them shall receive the
8benefit of this subsection, and it is immaterial whether they
9file a joint return or separate returns. However, if a husband
10and wife file separate returns and have a combined net income
11of thirty-two thousand dollars or less, neither spouse shall
12receive the benefit of this paragraph, if one spouse has a net
13operating loss and elects to carry back or carry forward the
14loss as provided under the Internal Revenue Code or in section
15422.9, subsection 3. A person who is claimed as a dependent by
16another person as defined in section 422.12 shall not receive
17the benefit of this subsection if the person claiming the
18dependent has net income exceeding thirty-two thousand dollars
19or twenty-four thousand dollars as applicable or the person
20claiming the dependent and the person’s spouse have combined
21net income exceeding thirty-two thousand dollars or twenty-four
22thousand dollars as applicable.
23b. In lieu of the computation in subsection 1, 2, or 3, if
24the married persons’, filing jointly or filing separately on
25a combined return, head of household’s, or surviving spouse’s
26net income exceeds thirty-two thousand dollars, the regular tax
27imposed under this division shall be the lesser of the maximum
28state individual income tax rate for the tax year times the
29portion of the net income in excess of thirty-two thousand
30dollars or the regular tax liability computed without regard
31to this sentence. Taxpayers electing to file separately shall
32compute the alternate tax described in this paragraph using the
33total net income of the husband and wife. The alternate tax
34described in this paragraph does not apply if one spouse elects
35to carry back or carry forward the loss as provided under the
-8-1Internal Revenue Code or in section 422.9, subsection 3.
2c. This subsection applies even though one spouse has not
3attained the age of sixty-five, if the other spouse is at least
4sixty-five at the end of the tax year.
5 Sec. 16. Section 422.5, subsection 6, Code 2018, is amended
6by striking the subsection and inserting in lieu thereof the
7following:
86. Upon determination of the latest cumulative inflation
9factor, the director shall reduce each tax rate in subsection
101, paragraphs “a” through “d”, and paragraph “e”, subparagraph
11(4), by the same percentage that the latest cumulative
12inflation factor exceeds one hundred percent, shall round off
13the resulting rate to the nearest one-hundredth of one percent,
14and shall incorporate the result into the income tax forms and
15instructions for each tax year.
16 Sec. 17. Section 422.7, unnumbered paragraph 1, Code 2018,
17is amended to read as follows:
18The term “net income” means the adjusted gross income before
19the net operating loss deduction taxable income as properly
20computed for federal income tax purposes under section 63 the
21Internal Revenue Code, with the following adjustments:
22 Sec. 18. Section 422.7, Code 2018, is amended by adding the
23following new subsections:
24 NEW SUBSECTION. 4. Add any federal net operating loss
25deduction carried over from a taxable year beginning prior to
26January 1, 2019.
27 NEW SUBSECTION. 6. a. For tax years beginning in the 2019
28calendar year, subtract the amount of federal income taxes
29paid during the tax year to the extent payment is for a tax
30year beginning prior to January 1, 2019, and add any federal
31income tax refunds received during the tax year to the extent
32the federal income tax was deducted for a tax year beginning
33prior to January 1, 2019. Where married persons who have filed
34a joint federal income tax return file separately for state tax
35purposes, such total shall be divided between them according
-9-1to the portion of the total paid by each. Federal income taxes
2paid for a tax year in which an Iowa return was not required to
3be filed shall not be subtracted.
4b. Notwithstanding any other provision of law to the
5contrary, amounts subtracted or added pursuant to this
6subsection shall not be included in the calculation of net
7income for purposes of section 422.5, subsection 3 or 3B, or
8section 422.13.
9 NEW SUBSECTION. 6A. Subtract, to the extent included,
10income from interest and earnings received from a burial trust
11fund as defined in section 523A.102.
12 Sec. 19. Section 422.7, subsection 12, paragraph a,
13unnumbered paragraph 1, Code 2018, is amended to read as
14follows:
15If For tax years beginning prior to January 1, 2022, if the
16adjusted gross federal taxable income includes income or loss
17from a small business operated by the taxpayer, an additional
18deduction shall be allowed in computing the income or loss from
19the small business if the small business hired for employment
20in the state during its annual accounting period ending with or
21during the taxpayer’s tax year any of the following:
22 Sec. 20. Section 422.7, subsection 12A, paragraph a,
23unnumbered paragraph 1, Code 2018, is amended to read as
24follows:
25If For tax years beginning prior to January 1, 2022, if the
26adjusted gross federal taxable income includes income or loss
27from a business operated by the taxpayer, and if the business
28does not qualify for the adjustment under subsection 12, an
29additional deduction shall be allowed in computing the income
30or loss from the business if the business hired for employment
31in the state during its annual accounting period ending with or
32during the taxpayer’s tax year either of the following:
33 Sec. 21. Section 422.7, subsection 13, Code 2018, is amended
34by striking the subsection and inserting in lieu thereof the
35following:
-10- 113. Subtract, to the extent included, the amount of social
2security benefits taxable under section 86 of the Internal
3Revenue Code.
4 Sec. 22. Section 422.7, Code 2018, is amended by adding the
5following new subsections:
6 NEW SUBSECTION. 18. Add, to the extent deducted for federal
7tax purposes, charitable contributions under section 170 of
8the Internal Revenue Code to the extent such contribution was
9made to an organization for the purpose of deposit in the Iowa
10education savings plan trust established in chapter 12D, and
11the taxpayer designated that any part of the contribution be
12used for the direct benefit of any dependent of the taxpayer or
13any other single beneficiary designated by the taxpayer.
14 NEW SUBSECTION. 19. a. Subtract, to the extent included,
15income resulting from the payment by an employer of the
16taxpayer, whether paid to the taxpayer or to a lender, of
17principal or interest on any qualified education loan incurred
18by the taxpayer.
19b. If the taxpayer has a deduction in computing federal
20taxable income under section 221 of the Internal Revenue Code
21for interest on a qualified education loan, the taxpayer shall
22recompute for purposes of this subsection the amount of the
23deduction under paragraph “a” by not subtracting any amount of
24income resulting from the employer’s payment of interest on a
25qualified education loan that was also deducted by the taxpayer
26under section 221 of the Internal Revenue Code.
27c. For purposes of this subsection, “qualified education
28loan” means the same as defined in section 221 of the Internal
29Revenue Code.
30 Sec. 23. Section 422.7, subsection 31, Code 2018, is amended
31to read as follows:
3231. a. For a person who is disabled, or is fifty-five
33years of age or older, or is the surviving spouse of an
34individual or a survivor having an insurable interest in an
35individual who would have qualified for the exemption under
-11-1this subsection for the tax year, subtract, to the extent
2included, the total amount of a governmental or other pension
3or retirement pay, including, but not limited to, defined
4benefit or defined contribution plans, annuities, individual
5retirement accounts, plans maintained or contributed to by an
6employer, or maintained or contributed to by a self-employed
7person as an employer, and deferred compensation plans or any
8earnings attributable to the deferred compensation plans, up
9to a maximum of six thousand dollars amount as specified in
10paragraph “b” for a person, other than a husband or wife, who
11files a separate state income tax return and up to a maximum
12of twelve thousand dollars amount as specified in paragraph
13“c” for a husband and wife who file a joint state income tax
14return. However, a surviving spouse who is not disabled or
15fifty-five years of age or older can only exclude the amount
16of pension or retirement pay received as a result of the death
17of the other spouse. A husband and wife filing separate state
18income tax returns or separately on a combined state return
19 are allowed a combined maximum exclusion under this subsection
20of up to twelve thousand dollars. The twelve thousand dollar
21 the maximum amount specified in paragraph “c”, which exclusion
22shall be allocated to the husband or wife in the proportion
23that each spouse’s respective pension and retirement pay
24received bears to total combined pension and retirement pay
25received.
26b. (1) For tax years beginning on or after January 1, 2019,
27but before January 1, 2022, the maximum exclusion amount equals
28ten thousand dollars.
29(2) For tax years beginning on or after January 1, 2022, the
30maximum exclusion amount equals twelve thousand dollars.
31c. (1) For tax years beginning on or after January 1, 2019,
32but before January 1, 2022, the maximum exclusion amount equals
33twenty thousand dollars.
34(2) For tax years beginning on or after January 1, 2022, the
35maximum exclusion amount equals twenty-four thousand dollars.
-12-1 Sec. 24. Section 422.7, subsection 41, Code 2018, is amended
2by adding the following new paragraph:
3 NEW PARAGRAPH. 0e. Add, to the extent deducted for
4federal tax purposes, interest, taxes, and other miscellaneous
5expenses to the extent such amounts are eligible home costs
6in connection with a qualified home purchase that were paid
7or reimbursed from funds in a first-time homebuyer savings
8account.
9 Sec. 25. Section 422.7, subsection 44, paragraph a,
10unnumbered paragraph 1, Code 2018, is amended to read as
11follows:
12If For tax years beginning before January 1, 2022, if the
13taxpayer, while living, donates one or more of the taxpayer’s
14human organs to another human being for immediate human organ
15transplantation during the tax year, subtract, to the extent
16not otherwise excluded, the following unreimbursed expenses
17incurred by the taxpayer and related to the taxpayer’s organ
18donation:
19 Sec. 26. Section 422.7, subsection 47, Code 2018, is amended
20to read as follows:
2147. Subtract, to the extent not otherwise deducted in
22computing adjusted gross federal taxable income, the amounts
23paid by the taxpayer to the department of veterans affairs for
24the purpose of providing grants under the injured veterans
25grant program established in section 35A.14. Amounts
26subtracted under this subsection shall not be used by the
27taxpayer in computing the amount of charitable contributions as
28defined by section 170 of the Internal Revenue Code.
29 Sec. 27. Section 422.7, Code 2018, is amended by adding the
30following new subsection:
31 NEW SUBSECTION. 51. The additional first-year depreciation
32allowance authorized in section 168(k) of the Internal Revenue
33Code does not apply in computing net income for state tax
34purposes. If the taxpayer has taken the additional first-year
35depreciation allowance for purposes of computing federal
-13-1taxable income, then the taxpayer shall make the following
2adjustments to federal taxable income when computing net income
3for state tax purposes:
4a. Add the total amount of depreciation taken under section
5168(k) of the Internal Revenue Code for the tax year.
6b. Subtract the amount of depreciation allowable under the
7modified accelerated cost recovery system described in section
8168 of the Internal Revenue Code and calculated without regard
9to section 168(k).
10c. Any other adjustments to gains or losses necessary to
11reflect the adjustments made in paragraphs “a” and “b”. The
12director shall adopt rules for the administration of this
13paragraph.
14 Sec. 28. Section 422.7, subsections 3, 7, 8, 9, 10, 11, 14,
1515, 16, 20, 21, 22, 23, 24, 25, 26, 29, 30, 35, 36, 37, 39, 39A,
1639B, 40, 43, 45, 49, 53, 55, 56, 57, and 58, Code 2018, are
17amended by striking the subsections.
18 Sec. 29. Section 422.8, subsection 4, Code 2018, is amended
19by striking the subsection.
20 Sec. 30. Section 422.9, Code 2018, is amended by striking
21the section and inserting in lieu thereof the following:
22422.9 Iowa net operating loss incurred prior to January 1,
232019.
24Any Iowa net operating loss carried over from a taxable year
25beginning prior to January 1, 2019, may be deducted as provided
26in section 422.9, subsection 3, Code 2018.
27 Sec. 31. Section 422.11S, subsection 4, Code 2018, is
28amended to read as follows:
294. Married taxpayers who file separate returns or file
30separately on a combined return form must determine the tax
31credit under subsection 1 based upon their combined net income
32and allocate the total credit amount to each spouse in the
33proportion that each spouse’s respective net income bears to
34the total combined net income. Nonresidents or part-year
35residents of Iowa must determine their tax credit in the ratio
-14-1of their Iowa source net income to their all source net income.
2Nonresidents or part-year residents who are married and elect
3to file separate returns or to file separately on a combined
4return form must allocate the tax credit between the spouses
5in the ratio of each spouse’s Iowa source net income to the
6combined Iowa source net income of the taxpayers.
7 Sec. 32. Section 422.12B, subsection 2, Code 2018, is
8amended to read as follows:
92. Married taxpayers electing to file separate returns or
10filing separately on a combined return may avail themselves
11of the earned income credit by allocating the earned income
12credit to each spouse in the proportion that each spouse’s
13respective earned income bears to the total combined earned
14income. Taxpayers affected by the allocation provisions of
15section 422.8 shall be permitted a deduction for the credit
16only in the amount fairly and equitably allocable to Iowa under
17rules prescribed by the director.
18 Sec. 33. Section 422.12C, subsection 4, Code 2018, is
19amended to read as follows:
204. Married taxpayers who have filed joint federal returns
21electing to file separate returns or to file separately on a
22combined return form must determine the child and dependent
23care credit under subsection 1 or the early childhood
24development tax credit under subsection 2 based upon their
25combined net income and allocate the total credit amount to
26each spouse in the proportion that each spouse’s respective net
27income bears to the total combined net income. Nonresidents
28or part-year residents of Iowa must determine their Iowa child
29and dependent care credit in the ratio of their Iowa source
30net income to their all source net income. Nonresidents or
31part-year residents who are married and elect to file separate
32returns or to file separately on a combined return form must
33allocate the Iowa child and dependent care credit between the
34spouses in the ratio of each spouse’s Iowa source net income to
35the combined Iowa source net income of the taxpayers.
-15-1 Sec. 34. Section 422.13, subsection 1, paragraph c, Code
22018, is amended by striking the paragraph.
3 Sec. 35. Section 422.16, subsection 1, paragraph f, Code
42018, is amended by striking the paragraph.
5 Sec. 36. Section 422.21, subsections 2, 5, and 7, Code 2018,
6are amended to read as follows:
72. An individual in the armed forces of the United States
8serving in an area designated by the president of the United
9States or the United States Congress as a combat zone or as a
10qualified hazardous duty area, or deployed outside the United
11States away from the individual’s permanent duty station while
12participating in an operation designated by the United States
13secretary of defense as a contingency operation as defined
14in 10 U.S.C. §101(a)(13), or which became such a contingency
15operation by the operation of law, or an individual serving in
16support of those forces, is allowed the same additional time
17period after leaving the combat zone or the qualified hazardous
18duty area, or ceasing to participate in such contingency
19operation, or after a period of continuous hospitalization, to
20file a state income tax return or perform other acts related
21to the department, as would constitute timely filing of the
22return or timely performance of other acts described in section
237508(a) of the Internal Revenue Code. An individual on active
24duty federal military service in the armed forces, armed forces
25military reserve, or national guard who is deployed outside
26the United States in other than a combat zone, qualified
27hazardous duty area, or contingency operation is allowed the
28same additional period of time described in section 7508(a)
29of the Internal Revenue Code to file a state income tax
30return or perform other acts related to the department. For
31the purposes of this subsection, “other acts related to the
32department” includes filing claims for refund for any tax
33administered by the department, making tax payments other than
34withholding payments, filing appeals on the tax matters, filing
35other tax returns, and performing other acts described in the
-16-1department’s rules. The additional time period allowed applies
2to the spouse of the individual described in this subsection
3to the extent the spouse files jointly or separately on the
4combined return form with the individual or when the spouse
5is a party with the individual to any matter for which the
6additional time period is allowed.
75. The director shall determine for the 1989 2022 and each
8subsequent calendar year the annual and cumulative inflation
9factors for each calendar year to be applied to tax years
10beginning on or after January 1 of that calendar year. The
11director shall compute the new dollar amounts tax rates
12 as specified to be adjusted in section 422.5 by the latest
13cumulative inflation factor and round off the result to the
14nearest one dollar one-hundredth of one percent. The annual
15and cumulative inflation factors determined by the director
16are not rules as defined in section 17A.2, subsection 11. The
17director shall determine for the 1990 calendar year and each
18subsequent calendar year the annual and cumulative standard
19deduction factors to be applied to tax years beginning on or
20after January 1 of that calendar year. The director shall
21compute the new dollar amounts of the standard deductions
22specified in section 422.9, subsection 1, by the latest
23cumulative standard deduction factor and round off the result
24to the nearest ten dollars. The annual and cumulative standard
25deduction factors determined by the director are not rules as
26defined in section 17A.2, subsection 11.
277. If married taxpayers file a joint return or file
28separately on a combined return in accordance with rules
29prescribed by the director, both spouses are jointly and
30severally liable for the total tax due on the return, except
31when one spouse is considered to be an innocent spouse under
32criteria established pursuant to section 6015 of the Internal
33Revenue Code.
34 Sec. 37. Section 422.32, subsection 1, paragraph h, Code
352018, is amended to read as follows:
-17- 1h. “Internal Revenue Code” means the Internal Revenue Code
2of 1954, prior to the date of its redesignation as the Internal
3Revenue Code of 1986 by the Tax Reform Act of 1986, or means
4the Internal Revenue Code of 1986, as amended and in effect
5on January 1, 2015. This definition shall not be construed
6to include any amendment to the Internal Revenue Code enacted
7after the date specified in the preceding sentence, including
8any amendment with retroactive applicability or effectiveness.
9 Sec. 38. Section 422.33, subsection 1, paragraphs a, b, c,
10and d, Code 2018, are amended to read as follows:
11a. On the first twenty-five thousand dollars of taxable
12income, or any part thereof, the rate of six percent for tax
13years beginning prior to January 1, 2021, and the rate of
14five and one-half percent for tax years beginning on or after
15January 1, 2021.
16b. On taxable income between twenty-five thousand dollars
17and one hundred thousand dollars or any part thereof, the rate
18of eight percent for tax years beginning prior to January 1,
192021, and the rate of five and one-half percent for tax years
20beginning on or after January 1, 2021.
21c. On taxable income between one hundred thousand dollars
22and two hundred fifty thousand dollars or any part thereof, the
23rate of ten percent for tax years beginning prior to January 1,
242020, the rate of eight percent for tax years beginning during
25the 2020 calendar year, and the rate of five and one-half
26percent for tax years beginning on or after January 1, 2021.
27d. On taxable income of two hundred fifty thousand dollars
28or more, the rate of twelve ten percent for tax years beginning
29on or after January 1, 2019, but prior to January 1, 2021, the
30rate of eight percent for tax years beginning during the 2021
31calendar year, and the rate of seven percent for tax years
32beginning on or after January 1, 2022.
33 Sec. 39. Section 422.33, subsection 4, Code 2018, is amended
34by striking the subsection.
35 Sec. 40. Section 422.35, unnumbered paragraph 1, Code 2018,
-18-1is amended to read as follows:
2The term “net income” means the taxable income before the
3net operating loss deduction, as properly computed for federal
4income tax purposes under the Internal Revenue Code, with the
5following adjustments:
6 Sec. 41. Section 422.35, subsection 4, Code 2018, is amended
7to read as follows:
84. Subtract fifty percent of the federal income taxes paid
9or accrued, as the case may be, during the tax year to the
10extent payment is for a tax year beginning prior to January 1,
112019, adjusted by any federal income tax refunds; and add the
12Iowa income tax deducted in computing said taxable income to
13the extent the tax was deducted for a tax year beginning prior
14to January 1, 2019.
15 Sec. 42. Section 422.35, subsection 6, paragraph a,
16unnumbered paragraph 1, Code 2018, is amended to read as
17follows:
18If For tax years beginning before January 1, 2022, if the
19taxpayer is a small business corporation, subtract an amount
20equal to sixty-five percent of the wages paid to individuals,
21but not to exceed twenty thousand dollars per individual, named
22in subparagraphs (1), (2), and (3) who were hired for the first
23time by the taxpayer during the tax year for work done in this
24state:
25 Sec. 43. Section 422.35, subsection 6A, paragraph a,
26unnumbered paragraph 1, Code 2018, is amended to read as
27follows:
28If For tax years beginning prior to January 1, 2022, if the
29taxpayer is a business corporation and does not qualify for
30the adjustment under subsection 6, subtract an amount equal to
31sixty-five percent of the wages paid to individuals, but shall
32not exceed twenty thousand dollars per individual, named in
33subparagraphs (1) and (2) who were hired for the first time by
34the taxpayer during the tax year for work done in this state:
35 Sec. 44. Section 422.35, subsection 11, Code 2018, is
-19-1amended by striking the subsection and inserting in lieu
2thereof the following:
311. a. Add any federal net operating loss deduction carried
4over from a taxable year beginning prior to January 1, 2019.
5b. Any Iowa net operating loss carried over from a taxable
6year beginning prior to January 1, 2019, may be deducted as
7provided in section 422.35, subsection 11, Code 2018.
8 Sec. 45. Section 422.35, Code 2018, is amended by adding the
9following new subsection:
10 NEW SUBSECTION. 23. The additional first-year depreciation
11allowance authorized in section 168(k) of the Internal Revenue
12Code does not apply in computing net income for state tax
13purposes. If the taxpayer has taken the additional first-year
14depreciation allowance for purposes of computing federal
15taxable income, then the taxpayer shall make the following
16adjustments to federal taxable income when computing net income
17for state tax purposes:
18a. Add the total amount of depreciation taken under section
19168(k) of the Internal Revenue Code for the tax year.
20b. Subtract the amount of depreciation allowable under the
21modified accelerated cost recovery system described in section
22168 of the Internal Revenue Code and calculated without regard
23to section 168(k).
24c. Any other adjustments to gains or losses necessary to
25reflect the adjustments made in paragraphs “a” and “b”. The
26director shall adopt rules for the administration of this
27paragraph.
28 Sec. 46. Section 422.35, subsections 3, 5, 7, 8, 10, 16,
2917, 18, 19, 19A, 19B, 20, 22, and 24, Code 2018, are amended by
30striking the subsections.
31 Sec. 47. Section 541B.3, subsection 1, paragraph b, Code
322018, is amended to read as follows:
33b. A married couple electing to file a joint Iowa individual
34income tax return may establish a joint first-time homebuyer
35savings account. Married taxpayers electing to file separate
-20-1tax returns or separately on a combined tax return for Iowa tax
2purposes shall not establish or maintain a joint first-time
3homebuyer savings account.
4 Sec. 48. Section 541B.6, Code 2018, is amended to read as
5follows:
6541B.6 Tax considerations.
7The state income tax treatment of a first-time homebuyer
8savings account shall be as provided in section 422.7,
9subsection 41, and section 422.9, subsection 2, paragraph “k”.
10 Sec. 49. EFFECTIVE DATE. This division of this Act takes
11effect January 1, 2019.
12 Sec. 50. APPLICABILITY. This division of this Act applies
13to tax years beginning on or after January 1, 2019.
14DIVISION III
15tax credits
16 Sec. 51. Section 8.57E, subsection 2, Code 2018, is amended
17to read as follows:
182. Moneys in the taxpayers trust fund shall only be used
19pursuant to appropriations or transfers made by the general
20assembly for tax relief. During each fiscal year beginning on
21or after July 1, 2014, but before June 30, 2020, in which the
22balance of the taxpayers trust fund equals or exceeds thirty
23million dollars, there is transferred from the taxpayers trust
24fund to the Iowa taxpayers trust fund tax credit fund created
25in section 422.11E, the entire balance of the taxpayers trust
26fund to be used for the Iowa taxpayers trust fund tax credit in
27accordance with section 422.11E, subsection 5.
28 Sec. 52. Section 15.119, subsection 2, paragraph a, Code
292018, is amended by striking the paragraph and inserting in
30lieu thereof the following:
31a. The high quality jobs program administered pursuant
32to sections 15.326 through 15.336. In allocating tax
33credits pursuant to this subsection, the authority shall not
34allocate more than eighty million dollars for purposes of this
35paragraph.
-21-1 Sec. 53. Section 15.119, subsection 2, paragraphs d, e, and
2g, Code 2018, are amended to read as follows:
3d. The tax credits for investments in qualifying businesses
4issued pursuant to section 15E.43. In allocating tax credits
5pursuant to this subsection, the authority shall not allocate
6two more than four million dollars for purposes of this
7paragraph, unless the authority determines that the tax credits
8awarded will be less than that amount.
9e. The tax credits for investments in an innovation fund
10pursuant to section 15E.52. In allocating tax credits pursuant
11to this subsection in a fiscal year in which the allocation for
12purposes of paragraph “d” does not exceed two million dollars,
13the authority shall not allocate more than eight million
14dollars for purposes of this paragraph, unless the authority
15determines that the tax credits awarded will be less than that
16amount. In allocating tax credits pursuant to this subsection
17in a fiscal year in which the allocation for purposes of
18paragraph “d” exceeds two million dollars, the authority shall
19not allocate for purposes of this paragraph an amount that
20exceeds an amount equal to the difference of eight million
21dollars less the amount that the allocation for purposes of
22paragraph “d” exceeds two million dollars for the same fiscal
23year.
24g. The workforce housing tax incentives program administered
25pursuant to sections 15.351 through 15.356. In allocating
26tax credits pursuant to this subsection, the authority shall
27not allocate more than twenty twenty-two million dollars for
28purposes of this paragraph. Of the moneys allocated under this
29paragraph, five seven million dollars shall be reserved for
30allocation to qualified housing projects in small cities, as
31defined in section 15.352, that are registered on or after July
321, 2017.
33 Sec. 54. Section 15.329, subsection 1, paragraph f, Code
342018, is amended to read as follows:
35f. The business shall not be a retail business or a business
-22-1where entrance is limited by a cover charge or membership
2requirement, or a web search portal business as defined in
3section 423.3, subsection 93, or a data center business as
4defined in section 423.3, subsection 95, unless such web search
5portal business or data center business had a physical presence
6in this state prior to January 1, 2019.
7 Sec. 55. Section 15.331A, subsection 1, Code 2018, is
8amended to read as follows:
91. The eligible business shall be entitled to a refund
10of the sales and use taxes paid under chapter 423 for gas,
11electricity, water, or sewer utility services, goods, wares, or
12merchandise, or on services rendered, furnished, or performed
13to or for a contractor or subcontractor and used in the
14fulfillment of a written contract relating to the construction
15or equipping of a facility that is part of a project of the
16eligible business. Taxes attributable to intangible property
17and furniture and furnishings shall not be refunded. However,
18an eligible business shall be entitled to a refund for taxes
19attributable to racks, shelving, and conveyor equipment to be
20used in a warehouse or distribution center subject to section
2115.331C.
22 Sec. 56. Section 15.331C, Code 2018, is amended to read as
23follows:
2415.331C Corporate tax credit for certain sales taxes paid by
25third-party developer.
261. An eligible business may claim a corporate tax credit
27in an amount equal to the sales and use taxes paid by a
28third-party developer under chapter 423 for gas, electricity,
29water, or sewer utility services, goods, wares, or merchandise,
30or on services rendered, furnished, or performed to or for a
31contractor or subcontractor and used in the fulfillment of a
32written contract relating to the construction or equipping of
33a facility of the eligible business. Taxes attributable to
34intangible property and furniture and furnishings shall not
35be included, but taxes attributable to racks, shelving, and
-23-1conveyor equipment to be used in a warehouse or distribution
2center shall be included. Any credit in excess of the tax
3liability for the tax year may be credited to the tax liability
4for the following seven years or until depleted, whichever
5occurs earlier. An eligible business may elect to receive a
6refund of all or a portion of an unused tax credit.
72. A third-party developer shall state under oath, on
8forms provided by the department of revenue, the amount of
9taxes paid as described in subsection 1 and shall submit such
10forms to the department of revenue. The taxes paid shall be
11itemized to allow identification of the taxes attributable
12to racks, shelving, and conveyor equipment to be used in a
13warehouse or distribution center. After receiving the form
14from the third-party developer, the department of revenue shall
15issue a tax credit certificate to the eligible business equal
16to the sales and use taxes paid by a third-party developer
17under chapter 423 for gas, electricity, water, or sewer
18utility services, goods, wares, or merchandise, or on services
19rendered, furnished, or performed to or for a contractor or
20subcontractor and used in the fulfillment of a written contract
21relating to the construction or equipping of a facility.
22The department of revenue shall also issue a tax credit
23certificate to the eligible business equal to the taxes paid
24and attributable to racks, shelving, and conveyor equipment to
25be used in a warehouse or distribution center. The aggregate
26combined total amount of tax refunds under section 15.331A for
27taxes attributable to racks, shelving, and conveyor equipment
28to be used in a warehouse or distribution center and of tax
29credit certificates issued by the department of revenue for the
30taxes paid and attributable to racks, shelving, and conveyor
31equipment to be used in a warehouse or distribution center
32shall not exceed five hundred thousand dollars in a fiscal
33year. If an applicant for a tax credit certificate does not
34receive a certificate for the taxes paid and attributable
35to racks, shelving, and conveyor equipment to be used in a
-24-1warehouse or distribution center, the application shall be
2considered in succeeding fiscal years. The eligible business
3shall not claim a tax credit under this section unless a tax
4credit certificate issued by the department of revenue is
5included with the taxpayer’s tax return for the tax year for
6which the tax credit is claimed. A tax credit certificate
7shall contain the eligible business’s name, address, tax
8identification number, the amount of the tax credit, and other
9information deemed necessary by the department of revenue.
10 Sec. 57. Section 15.335, subsection 7, paragraph b, Code
112018, is amended by striking the paragraph and inserting in
12lieu thereof the following:
13b. For purposes of this section, “Internal Revenue Code”
14means the same as defined in section 422.3.
15 Sec. 58. Section 15.335, subsection 8, Code 2018, is amended
16by striking the subsection and inserting in lieu thereof the
17following:
188. Any tax credit in excess of the taxpayer’s liability for
19the tax year is not refundable and may not be credited to the
20tax liability for any other year.
21 Sec. 59. Section 16.80, subsection 5, paragraphs a and b,
22Code 2018, are amended to read as follows:
23a. Except as provided in paragraph “b”, the tax credit shall
24equal five seven percent of the amount paid to the taxpayer
25under the agreement.
26b. The tax credit shall equal fifteen seventeen percent
27of the amount paid to the taxpayer from crops or animals sold
28under an agreement in which the payment is exclusively made
29from the sale of crops or animals.
30 Sec. 60. Section 16.80, subsection 10, Code 2018, is amended
31to read as follows:
3210. The amount of tax credit certificates that may be issued
33pursuant to this section shall not exceed six eight million
34dollars in any fiscal year. The authority shall issue the tax
35credit certificates on a first-come, first-served basis.
-25-1 Sec. 61. NEW SECTION. 260G.8 Future repeal.
2This chapter is repealed effective July 1, 2025.
3 Sec. 62. Section 403.19A, subsection 3, paragraph c,
4subparagraph (2), Code 2018, is amended to read as follows:
5(2) The pilot project city and the economic development
6authority shall not enter into a withholding agreement after
7June 30, 2018 2019.
8 Sec. 63. Section 404A.4, subsection 1, paragraph a, Code
92018, is amended to read as follows:
10a. Except as provided in subsections 2 and 3, the authority
11shall not award in any one fiscal year an amount of tax credits
12provided in section 404A.2 in excess of forty-five forty
13 million dollars.
14 Sec. 64. Section 404A.4, subsections 2 and 3, Code 2018, are
15amended by striking the subsections.
16 Sec. 65. NEW SECTION. 404A.7 Future repeal.
17This chapter is repealed effective July 1, 2025.
18 Sec. 66. Section 422.10, subsection 1, Code 2018, is amended
19by adding the following new paragraph:
20 NEW PARAGRAPH. 0a. An individual shall only be eligible for
21the credit provided in this section if the business conducting
22the research meets all of the following requirements:
23(1) (a) The business is engaged in the manufacturing,
24life sciences, software engineering, or aviation and aerospace
25industry.
26(b) A person who is engaged in agricultural production
27as defined in section 423.1, or who is a contractor,
28subcontractor, builder, or a contractor-retailer that engages
29in commercial and residential repair and installation,
30including but not limited to heating or cooling installation
31and repair, plumbing and pipe fitting, security system
32installation, or electrical installation and repair, does not
33qualify under subparagraph division (a) and is not eligible
34for the credit. For purposes of this subparagraph division,
35“contractor-retailer” means a business that makes frequent
-26-1retail sales to the public or to other contractors and that
2also engages in the performance of construction contracts.
3(2) The business claims and is allowed a research credit
4for such qualified research expenses under section 41 of the
5Internal Revenue Code for the same taxable year as it is
6claiming the credit provided in this section.
7 Sec. 67. Section 422.10, subsection 3, Code 2018, is amended
8by adding the following new paragraph:
9 NEW PARAGRAPH. 0a. For purposes of this section, “base
10amount” means the product of the fixed-based percentage times
11the average annual gross receipts of the taxpayer for the four
12taxable years preceding the taxable year for which the credit
13is being determined, but in no event shall the base amount be
14less than fifty percent of the qualified research expenses for
15the credit year.
16 Sec. 68. Section 422.10, subsection 3, paragraph a, Code
172018, is amended to read as follows:
18a. For purposes of this section, “base amount”, “basic
19research payment”, and “qualified research expense” mean the
20same as defined for the federal credit for increasing research
21activities under section 41 of the Internal Revenue Code,
22except that for the alternative simplified credit such amounts
23are for research conducted within this state.
24 Sec. 69. Section 422.10, subsection 3, paragraph b, Code
252018, is amended by striking the paragraph.
26 Sec. 70. Section 422.11B, Code 2018, is amended to read as
27follows:
28422.11B Minimum tax credit.
291. a. There For tax years beginning before January 1, 2020,
30there is allowed as a credit against the tax determined in
31section 422.5, subsection 1, paragraphs “a” through “j” for a
32tax year an amount equal to the minimum tax credit for that tax
33year.
34b. The minimum tax credit for a tax year is the excess, if
35any, of the net minimum tax imposed for all prior tax years
-27-1beginning on or after January 1, 1987, but before January 1,
22019, over the amount allowable as a credit under this section
3for those prior tax years.
42. a. The allowable credit under subsection 1 for a
5tax year beginning before January 1, 2019, shall not exceed
6the excess, if any, of the tax determined in section 422.5,
7subsection 1, paragraphs “a” through “j” over the state
8alternative minimum tax as determined in section 422.5,
9subsection 2, Code 2018. The allowable credit under subsection
101 for a tax year beginning in the 2019 calendar year shall not
11exceed the tax determined under section 422.5, subsection 1.
12b. The net minimum tax for a tax year is the excess, if
13any, of the tax determined in section 422.5, subsection 2,
14Code 2018, for the tax year over the tax determined in section
15422.5, subsection 1, paragraphs “a” through “j” for the tax
16year.
173. This section is repealed January 1, 2020, for tax years
18beginning on or after January 1, 2020.
19 Sec. 71. Section 422.11E, Code 2018, is amended by adding
20the following new subsection:
21 NEW SUBSECTION. 6. This section is repealed on January 1,
222020.
23 Sec. 72. Section 422.11S, subsection 6, paragraph a, Code
242018, is amended to read as follows:
25a. “Eligible student” means a student who is a member of a
26household whose total annual income during the calendar year
27before the student receives a tuition grant for purposes of
28this section does not exceed an amount equal to three four
29 times the most recently published federal poverty guidelines in
30the federal register by the United States department of health
31and human services.
32 Sec. 73. Section 422.11S, subsection 8, paragraph a,
33subparagraph (2), Code 2018, is amended to read as follows:
34(2) “Total approved tax credits” means for the tax year
35beginning in the 2006 calendar year, two million five hundred
-28-1thousand dollars, for the tax year beginning in the 2007
2calendar year, five million dollars, for tax years beginning
3on or after January 1, 2008, but before January 1, 2012, seven
4million five hundred thousand dollars, for tax years beginning
5on or after January 1, 2012, but before January 1, 2014, eight
6million seven hundred fifty thousand dollars, and for tax years
7beginning on or after January 1, 2014, but before January 1,
82019, twelve million dollars, and for tax years beginning on or
9after January 1, 2019, thirteen million dollars.
10 Sec. 74. Section 422.12, subsection 2, paragraph b, Code
112018, is amended to read as follows:
12b. A For tax years beginning before January 1, 2022, a
13 tuition credit equal to twenty-five percent of the first one
14thousand dollars which the taxpayer has paid to others for each
15dependent in grades kindergarten through twelve, for tuition
16and textbooks of each dependent in attending an elementary or
17secondary school situated in Iowa, which school is accredited
18or approved under section 256.11, which is not operated for
19profit, and which adheres to the provisions of the federal
20Civil Rights Act of 1964 and chapter 216. Notwithstanding
21any other provision, all other credits allowed under this
22subsection shall be deducted before the tuition credit under
23this paragraph. The department, when conducting an audit of
24a taxpayer’s return, shall also audit the tuition tax credit
25portion of the tax return.
26 Sec. 75. Section 422.12, subsection 2, paragraph c,
27subparagraph (1), Code 2018, is amended to read as follows:
28(1) A For tax years beginning before January 1, 2022,
29a volunteer fire fighter and volunteer emergency medical
30services personnel member credit equal to one hundred dollars
31to compensate the taxpayer for the voluntary services if the
32volunteer served for the entire tax year. A taxpayer who
33is a paid employee of an emergency medical services program
34or a fire department and who is also a volunteer emergency
35medical services personnel member or volunteer fire fighter in
-29-1a city, county, or area governed by an agreement pursuant to
2chapter 28E where the emergency medical services program or
3fire department performs services, shall qualify for the credit
4provided under this paragraph “c”.
5 Sec. 76. Section 422.12, subsection 2, paragraph d,
6subparagraph (1), Code 2018, is amended to read as follows:
7(1) A For tax years beginning before January 1, 2022, a
8 reserve peace officer credit equal to one hundred dollars to
9compensate the taxpayer for services as a reserve peace officer
10if the reserve peace officer served for the entire tax year.
11 Sec. 77. Section 422.33, subsection 5, Code 2018, is amended
12by adding the following new paragraph:
13 NEW PARAGRAPH. 0e. A corporation shall only be
14eligible for the credit provided in this subsection if the
15business conducting the research meets all of the following
16requirements:
17(1) (a) The business is engaged in the manufacturing,
18life sciences, software engineering, or aviation and aerospace
19industry.
20(b) A person who is engaged in agricultural production
21as defined in section 423.1, or who is a contractor,
22subcontractor, builder, or a contractor-retailer that engages
23in commercial and residential repair and installation,
24including but not limited to heating or cooling installation
25and repair, plumbing and pipe fitting, security system
26installation, or electrical installation and repair, does not
27qualify under subparagraph division (a) and is not eligible
28for the credit. For purposes of this subparagraph division,
29“contractor-retailer” means a business that makes frequent
30retail sales to the public or to other contractors and that
31also engages in the performance of construction contracts.
32(2) The business claims and is allowed a research credit
33for such qualified research expenses under section 41 of the
34Internal Revenue Code for the same taxable year as it is
35claiming the credit provided in this subsection.
-30-1 Sec. 78. Section 422.33, subsection 5, paragraph e, Code
22018, is amended by adding the following new subparagraph:
3 NEW SUBPARAGRAPH. (01) For purposes of this section, “base
4amount” means the product of the fixed-based percentage times
5the average annual gross receipts of the taxpayer for the four
6taxable years preceding the taxable year for which the credit
7is being determined, but in no event shall the base amount be
8less than fifty percent of the qualified research expenses for
9the credit year.
10 Sec. 79. Section 422.33, subsection 5, paragraph e,
11subparagraph (1), Code 2018, is amended to read as follows:
12(1) For purposes of this subsection, “base amount”, “basic
13research payment”, and “qualified research expense” mean the
14same as defined for the federal credit for increasing research
15activities under section 41 of the Internal Revenue Code,
16except that for the alternative simplified credit such amounts
17are for research conducted within this state.
18 Sec. 80. Section 422.33, subsection 5, paragraph e,
19subparagraph (2), Code 2018, is amended by striking the
20subparagraph.
21 Sec. 81. Section 422.33, subsection 7, Code 2018, is amended
22to read as follows:
237. a. (1) There For tax years beginning before January 1,
242020, there is allowed as a credit against the tax determined
25in subsection 1 for a tax year an amount equal to the minimum
26tax credit for that tax year.
27(2) The minimum tax credit for a tax year is the excess,
28if any, of the net minimum tax imposed for all prior tax years
29beginning on or after January 1, 1987, but before January
301, 2019, over the amount allowable as a credit under this
31subsection for those prior tax years.
32b. (1) The allowable credit under paragraph “a” for a tax
33year beginning before January 1, 2019, shall not exceed the
34excess, if any, of the tax determined in subsection 1 over
35the state alternative minimum tax as determined in subsection
-31-14. The allowable credit under paragraph “a” for a tax year
2beginning in the 2019 calendar year shall not exceed the tax
3determined in subsection 1.
4(2) The net minimum tax for a tax year is the excess, if
5any, of the tax determined in subsection 4 for the tax year
6over the tax determined in subsection 1 for the tax year.
7c. This subsection is repealed January 1, 2020, for tax
8years beginning on or after January 1, 2020.
9 Sec. 82. 2018 INTERIM TAX CREDIT STUDY. The legislative tax
10expenditure committee created in section 2.45 shall study all
11tax credits available under Iowa law during the 2018 interim.
12The study shall comprehensively review and evaluate each tax
13credit to assess its cost, equity, simplicity, competitiveness,
14public purpose, adequacy, effectiveness, and the extent of
15conformance with the original purpose of the tax credit. The
16legislative tax expenditure committee shall also consider
17new or different tax credits or other incentive programs
18for economic development that will improve predictability,
19flexibility, and utilization, and put Iowa in the best position
20for attracting and retaining business in the future. The
21legislative tax expenditure committee shall submit its findings
22and recommendations to the general assembly for consideration
23during the 2019 legislative session.
24 Sec. 83. FUTURE REPEAL. Sections 15.326, 15.327, 15.329,
2515.330, 15.330A, 15.331A, 15.331C, 15.332, 15.333, 15.333A,
2615.335, 15.335A, 15.335B, 15.335C, and 15.336, Code 2018, are
27repealed effective July 1, 2025.
28 Sec. 84. REPEAL. Sections 422.10A, 422.11I, and 422.11N,
29Code 2018, are repealed.
30 Sec. 85. REPEAL. Section 422.11L, Code 2018, is repealed.
31 Sec. 86. REPEAL. Chapter 190B, Code 2018, is repealed.
32 Sec. 87. EFFECTIVE DATE AND APPLICABILITY.
331. Except as provided in subsections 2 through 15, this
34division of this Act takes effect January 1, 2019, and applies
35to tax years beginning on or after that date.
-32- 12. The section of this division of this Act repealing
2section 422.11L, takes effect July 1, 2018, and applies to
3solar energy system installations occurring on or after that
4date.
53. The section of this division of this Act striking and
6replacing section 15.119, subsection 2, paragraph “a”, takes
7effect July 1, 2018.
84. The section of this division of this Act amending section
915.119, subsection 2, paragraphs “d”, “e”, and “g”, takes
10effect July 1, 2018.
115. The sections of this division of this Act amending
12section 404A.4 take effect July 1, 2018.
136. The section of this division of this Act amending section
1416.80, subsection 10, takes effect July 1, 2018.
157. The sections of this division of this Act enacting
16section 422.10, subsection 1, paragraph “0a”, and enacting
17section 422.33, subsection 5, paragraph “0e”, being deemed of
18immediate importance, take effect upon enactment, and apply
19retroactively to January 1, 2018, for tax years beginning on or
20after that date and for tax returns, including amended returns,
21filed on or after that date for any tax year.
228. The sections of this division of this Act amending
23section 422.10, subsection 3, paragraph “a”, and section
24422.33, subsection 5, paragraph “e”, subparagraph (1), and
25enacting section 422.10, subsection 3, paragraph “0a”, and
26section 422.33, subsection 5, paragraph “e”, subparagraph
27(01), being deemed of immediate importance, take effect upon
28enactment, and apply retroactively to January 1, 2010, for tax
29years beginning on or after that date.
309. The section of this division of this Act amending section
3115.329, subsection 1, paragraph “f”, takes effect July 1, 2018.
3210. The section of this division of this Act amending
33section 403.19A, subsection 3, paragraph “c”, subparagraph (2),
34takes effect July 1, 2018.
3511. The section of this division of this Act establishing
-33-1a 2018 interim tax credit study by the legislative tax
2expenditure committee takes effect July 1, 2018.
312. The sections of this division of this Act amending
4section 15.331A, subsection 1, section 15.331C, and section
515.335, subsection 8, apply to high quality jobs program
6agreements entered into on or after July 1, 2018, and high
7quality jobs program agreements entered into prior to July
81, 2018, shall be governed by section 15.331A, subsection 1,
9section 15.331C, and section 15.335, subsection 8, Code 2018.
1013. The repeal of the accelerated career education program
11by the section of this division of this Act enacting section
12260G.8, shall not constitute grounds for rescission or
13modification of agreements entered into under chapter 260G
14prior to July 1, 2025. Any agreement entered into under
15chapter 260G prior to July 1, 2025, shall remain in effect
16until it expires under its own terms, and shall be governed by
17chapter 260G as that chapter existed immediately prior to July
181, 2025.
1914. The repeal of the historic preservation tax credit
20program by the section of this division of this Act enacting
21section 404A.7, shall not constitute grounds for rescission
22or modification of agreements entered into under chapter 404A
23prior to July 1, 2025. Any agreement entered into under
24chapter 404A prior to July 1, 2025, shall remain in effect
25until it expires under its own terms, and shall be governed by
26chapter 404A as that chapter existed immediately prior to July
271, 2025.
2815. The repeal of the high quality jobs program by the
29section of this division of this Act repealing sections 15.326,
3015.327, 15.329, 15.330, 15.330A, 15.331A, 15.331C, 15.332,
3115.333, 15.333A, 15.335, 15.335A, 15.335B, 15.335C, and 15.336,
32shall not constitute grounds for rescission or modification of
33agreements entered into under those sections prior to July 1,
342025. Any agreement entered into under those sections prior
35to July 1, 2025, shall remain in effect until it expires under
-34-1its own terms, and shall be governed by those sections as they
2existed immediately prior to July 1, 2025.
3DIVISION IV
4FRANCHISE TAX AND MONEYS AND CREDITS TAX
5 Sec. 88. Section 15.293A, subsection 1, paragraph a, Code
62018, is amended to read as follows:
7a. A redevelopment tax credit shall be allowed against
8the taxes imposed in chapter 422, divisions II, III, and V,
9and in chapter 432, and against the moneys and credits tax
10imposed in section 533.329, for a portion of a taxpayer’s
11equity investment, as provided in subsection 3, in a qualifying
12redevelopment project.
13 Sec. 89. Section 15.293A, subsection 2, paragraphs c and f,
14Code 2018, are amended to read as follows:
15c. The tax credit certificate, unless rescinded by the
16authority, shall be accepted by the department of revenue as
17payment for taxes imposed pursuant to chapter 422, divisions
18II, III, and V, and in chapter 432, and for the moneys and
19credits tax imposed in section 533.329, subject to any
20conditions or restrictions placed by the authority upon
21the face of the tax credit certificate and subject to the
22limitations of this section.
23f. A tax credit shall not be claimed by a transferee
24under this section until a replacement tax credit certificate
25identifying the transferee as the proper holder has been
26issued. The transferee may use the amount of the tax credit
27transferred against the taxes imposed in chapter 422, divisions
28II, III, and V, and in chapter 432, and against the moneys and
29credits tax imposed in section 533.329, for any tax year the
30original transferor could have claimed the tax credit. Any
31consideration received for the transfer of the tax credit shall
32not be included as income under chapter 422, divisions II, III,
33and V. Any consideration paid for the transfer of the tax
34credit shall not be deducted from income under chapter 422,
35divisions II, III, and V.
-35-1 Sec. 90. Section 15.333, subsection 1, Code 2018, is amended
2to read as follows:
31. An eligible business may claim a tax credit equal to a
4percentage of the new investment directly related to new jobs
5created or retained by the project. The tax credit shall be
6amortized equally over five calendar years. The tax credit
7shall be allowed against taxes imposed under chapter 422,
8division II, III, or V, and against the moneys and credits tax
9imposed in section 533.329. If the business is a partnership,
10S corporation, limited liability company, cooperative organized
11under chapter 501 and filing as a partnership for federal tax
12purposes, or estate or trust electing to have the income taxed
13directly to the individual, an individual may claim the tax
14credit allowed. The amount claimed by the individual shall
15be based upon the pro rata share of the individual’s earnings
16of the partnership, S corporation, limited liability company,
17cooperative organized under chapter 501 and filing as a
18partnership for federal tax purposes, or estate or trust. The
19percentage shall be determined as provided in section 15.335A.
20 Any tax credit in excess of the tax liability for the tax year
21may be credited to the tax liability for the following seven
22years or until depleted, whichever occurs first.
23 Sec. 91. Section 15.355, subsection 3, paragraph b, Code
242018, is amended to read as follows:
25b. The tax credit shall be allowed against the taxes imposed
26in chapter 422, divisions II, III, and V, and in chapter 432,
27and against the moneys and credits tax imposed in section
28533.329.
29 Sec. 92. Section 15.355, subsection 3, paragraph e,
30subparagraphs (3) and (6), Code 2018, are amended to read as
31follows:
32(3) The tax credit certificate, unless rescinded by the
33authority, shall be accepted by the department of revenue as
34payment for taxes imposed pursuant to chapter 422, divisions
35II, III, and V, and in chapter 432, and for the moneys and
-36-1credits tax imposed in section 533.329, subject to any
2conditions or restrictions placed by the authority upon
3the face of the tax credit certificate and subject to the
4limitations of this program.
5(6) A tax credit shall not be claimed by a transferee
6under this section until a replacement tax credit certificate
7identifying the transferee as the proper holder has been
8issued. The transferee may use the amount of the tax credit
9transferred against the taxes imposed in chapter 422, divisions
10II, III, and V, and in chapter 432, and against the moneys and
11credits tax imposed in section 533.329, for any tax year the
12original transferor could have claimed the tax credit. Any
13consideration received for the transfer of the tax credit shall
14not be included as income under chapter 422, divisions II,
15III, and V. Any consideration paid for the transfer of the tax
16credit shall not be deducted from income under chapter 422,
17divisions II, III, and V.
18 Sec. 93. Section 15E.43, subsection 1, paragraphs a and d,
19Code 2018, are amended to read as follows:
20a. For tax years beginning on or after January 1, 2015,
21a tax credit shall be allowed against the taxes imposed in
22chapter 422, divisions II, III, and V, and in chapter 432, and
23against the moneys and credits tax imposed in section 533.329,
24 for a portion of a taxpayer’s equity investment, as provided in
25subsection 2, in a qualifying business.
26d. For a tax credit claimed against the taxes imposed in
27chapter 422, division II, any tax credit in excess of the
28tax liability is refundable. In lieu of claiming a refund,
29the taxpayer may elect to have the overpayment shown on
30the taxpayer’s final, completed return credited to the tax
31liability for the following tax year. For a tax credit claimed
32against the taxes imposed in chapter 422, divisions III and
33V, and in chapter 432, and against the moneys and credits tax
34imposed in section 533.329, any tax credit in excess of the
35taxpayer’s liability for the tax year may be credited to the
-37-1tax liability for the following three years or until depleted,
2whichever is earlier. A tax credit shall not be carried back
3to a tax year prior to the tax year in which the taxpayer
4redeems the tax credit.
5 Sec. 94. Section 15E.44, subsection 4, Code 2018, is amended
6to read as follows:
74. After verifying the eligibility of a qualifying
8business, the authority shall issue a tax credit certificate
9to be included with the equity investor’s tax return. The tax
10credit certificate shall contain the taxpayer’s name, address,
11tax identification number, the amount of credit, the name of
12the qualifying business, and other information required by the
13department of revenue. The tax credit certificate, unless
14rescinded by the authority, shall be accepted by the department
15of revenue as payment for taxes imposed pursuant to chapter
16422, divisions II, III, and V, and in chapter 432, and for the
17moneys and credits tax imposed in section 533.329, subject to
18any conditions or restrictions placed by the authority upon
19the face of the tax credit certificate and subject to the
20limitations of section 15E.43.
21 Sec. 95. Section 15E.52, subsection 2, paragraph a, Code
222018, is amended to read as follows:
23a. A tax credit shall be allowed against the taxes imposed
24in chapter 422, divisions II, III, and V, and in chapter 432,
25and against the moneys and credits tax imposed in section
26533.329, for a portion of a taxpayer’s equity investment in the
27form of cash in an innovation fund.
28 Sec. 96. Section 15E.52, subsection 13, Code 2018, is
29amended to read as follows:
3013. The transferee may use the amount of the tax credit
31transferred against the taxes imposed in chapter 422, divisions
32II, III, and V, and in chapter 432, and against the moneys and
33credits tax imposed in section 533.329, for any tax year the
34original transferor could have claimed the tax credit. Any
35consideration received for the transfer of the tax credit shall
-38-1not be included as income under chapter 422, divisions II, III,
2and V. Any consideration paid for the transfer of the tax
3credit shall not be deducted from income under chapter 422,
4divisions II, III, and V.
5 Sec. 97. Section 15E.62, subsection 8, Code 2018, is amended
6to read as follows:
78. “Tax credit” means a contingent tax credit issued
8pursuant to section 15E.66 that is available against tax
9liabilities imposed by chapter 422, divisions II, III, and
10V, and by chapter 432 and against the moneys and credits tax
11imposed by section 533.329.
12 Sec. 98. Section 15E.305, subsection 1, Code 2018, is
13amended to read as follows:
141. For tax years beginning on or after January 1, 2003,
15a tax credit shall be allowed against the taxes imposed in
16chapter 422, divisions II, III, and V, and in chapter 432, and
17against the moneys and credits tax imposed in section 533.329
18 equal to twenty-five percent of a taxpayer’s endowment gift to
19an endow Iowa qualified community foundation. An individual
20may claim a tax credit under this section of a partnership,
21limited liability company, S corporation, estate, or trust
22electing to have income taxed directly to the individual. The
23amount claimed by the individual shall be based upon the pro
24rata share of the individual’s earnings from the partnership,
25limited liability company, S corporation, estate, or trust. A
26tax credit shall be allowed only for an endowment gift made to
27an endow Iowa qualified community foundation for a permanent
28endowment fund established to benefit a charitable cause in
29this state. The amount of the endowment gift for which the
30tax credit is claimed shall not be deductible in determining
31taxable income for state income tax purposes. Any tax credit
32in excess of the taxpayer’s tax liability for the tax year may
33be credited to the tax liability for the following five years
34or until depleted, whichever occurs first. A tax credit shall
35not be carried back to a tax year prior to the tax year in which
-39-1the taxpayer claims the tax credit.
2 Sec. 99. Section 331.427, subsection 1, unnumbered
3paragraph 1, Code 2018, is amended to read as follows:
4Except as otherwise provided by state law, county revenues
5from taxes and other sources for general county services shall
6be credited to the general fund of the county, including
7revenues received under sections 9I.11, 101A.3, 101A.7, 123.36,
8123.143, 142D.9, 176A.8, 321.105, 321.152, 321G.7, 321I.8,
9section 331.554, subsection 6, sections 341A.20, 364.3, 368.21,
10423A.7, 428A.8, 433.15, 434.19, 445.57, 453A.35, 458A.21,
11483A.12, 533.329, 556B.1, 583.6, 602.8108, 904.908, and 906.17,
12and the following:
13 Sec. 100. Section 422.60, subsection 2, paragraph a, Code
142018, is amended to read as follows:
15a. In addition to all taxes imposed under this division,
16there is imposed upon each financial institution doing business
17within the state and that is not exempt from the federal income
18tax, the greater of the tax determined in section 422.63 or
19the state alternative minimum tax equal to sixty percent of
20the maximum state franchise tax rate, rounded to the nearest
21one-tenth of one percent, of the state alternative minimum
22taxable income of the taxpayer computed under this subsection.
23 Sec. 101. Section 422.60, subsection 3, paragraph a,
24subparagraph (1), Code 2018, is amended to read as follows:
25(1) There For a financial institution that is not exempt
26from the federal income tax, there is allowed as a credit
27against the tax determined in section 422.63 for a tax year an
28amount equal to the minimum tax credit for that tax year.
29 Sec. 102. Section 422.61, subsections 1, 3, and 4, Code
302018, are amended to read as follows:
311. “Financial institution” means a state bank as defined in
32section 524.103, subsection 41, a state bank chartered under
33the laws of any other state, a national banking association,
34a trust company, a federally chartered savings and loan
35association, an out-of-state state chartered savings bank, a
-40-1credit union as defined in section 533.102 that is incorporated
2or organized under chapter 533 or under the laws of another
3state, a financial institution chartered by the federal
4home loan bank board, a non-Iowa chartered savings and loan
5association, or a production credit association.
63. a. “Net income” means one of the following:
7(1) For a financial institution that is exempt from the
8federal income tax, the total revenue less total expenses as
9properly reported on the financial institution’s internal
10revenue service form 990 covering the same period, with the
11adjustments in paragraph “b” to the extent the taxes, income,
12and deductions described in such adjustments are applicable
13to the financial institution’s calculation of revenues and
14expenses as determined by the director by rule.
15(2) For any other financial institution,the net income of
16the financial institution computed in accordance with section
17422.35, with the following adjustments: in paragraph “b”.
18b. Applicable adjustments in computing “net income”:
19a. (1) Federal income taxes paid or accrued shall not be
20subtracted.
21b. (2) Notwithstanding section 422.35, subsection 2, or
22any other provisions of law, income from obligations of the
23state and its political subdivisions and franchise taxes paid
24or accrued under this division during the taxable year shall
25be added. Income from sales of obligations of the state and
26its political subdivisions and interest and dividend income
27from these obligations are exempt from the taxes imposed by
28this division only if the law authorizing the obligations
29specifically exempts the income from the sale and interest and
30dividend income from the state franchise tax.
31c. (3) Interest and dividends from federal securities shall
32not be subtracted.
33d. (4) Interest and dividends derived from obligations of
34United States possessions, agencies, and instrumentalities,
35including bonds which were purchased after January 1, 1991, and
-41-1issued by the governments of Puerto Rico, Guam, and the Virgin
2Islands shall be added, to the extent they were not included in
3computing federal taxable income.
4e. (5) A deduction disallowed under section 265(b) or
5section 291(e)(1)(B) of the Internal Revenue Code shall be
6subtracted.
7f. (6) A deduction shall not be allowed for that portion of
8the taxpayer’s expenses computed under this paragraph which is
9allocable to an investment in an investment subsidiary. The
10portion of the taxpayer’s expenses which is allocable to an
11investment in an investment subsidiary is an amount which bears
12the same ratio to the taxpayer’s expenses as the taxpayer’s
13average adjusted basis, as computed pursuant to section 1016
14of the Internal Revenue Code, of investment in that investment
15subsidiary bears to the average adjusted basis for all assets
16of the taxpayer. The portion of the taxpayer’s expenses that
17is computed and disallowed under this paragraph shall be added.
18g. (7) Where a financial institution as defined in section
19581 of the Internal Revenue Code is not subject to income tax
20and the shareholders of the financial institution are taxed on
21the financial institution’s income under the provisions of the
22Internal Revenue Code, such tax treatment shall be disregarded
23and the financial institution shall compute its net income for
24franchise tax purposes in the same manner under this subsection
25as a financial institution that is subject to or liable for
26federal income tax under the Internal Revenue Code in effect
27for the applicable year.
284. “Taxable year” means the calendar year or the fiscal year
29ending during a calendar year, for which the tax is payable.
30“Fiscal year” includes a tax period of less than twelve months
31if, under the Internal Revenue Code, a corporation is required
32to file a tax return or internal revenue service form 990
33 covering a tax period of less than twelve months.
34 Sec. 103. Section 422.62, Code 2018, is amended to read as
35follows:
-42- 1422.62 Due and delinquent dates.
2The franchise tax is due and payable on the first day
3following the end of the taxable year of each financial
4institution, and for a financial institution that is exempt
5from the federal income tax, the franchise tax is delinquent
6after the last day of the fifth month following the due date.
7For all other financial institutions, the franchise tax is
8delinquent after the last day of the fourth month following the
9due date or forty-five days after the due date of the federal
10tax return, excluding extensions of time to file, whichever is
11the later. Every financial institution shall file a return as
12prescribed by the director on or before the delinquency date.
13 Sec. 104. Section 422.63, Code 2018, is amended to read as
14follows:
15422.63 Amount of tax.
161. The franchise tax is imposed annually in an amount equal
17to five percent of computed by applying the following rates
18of taxation to the net income received or accrued during the
19taxable year:
20a. On net income from zero to seven million five hundred
21thousand dollars, two percent.
22b. On net income exceeding seven million five hundred
23thousand dollars, four percent.
242. If the net income of the financial institution is derived
25from its business carried on entirely within the state, the tax
26in subsection 1 shall be imposed on the entire net income, but
27if the business is carried on partly within and partly without
28the state, the tax in subsection 1 shall be imposed on the
29 portion of net income reasonably attributable to the business
30within the state, which net income shall be specifically
31allocated or equitably apportioned within and without the state
32under rules of the director.
33 Sec. 105. REPEAL. Section 533.329, Code 2018, is repealed.
34 Sec. 106. PRESERVATION OF EXISTING RIGHTS. This division
35of this Act is not intended and shall not limit, modify,
-43-1or otherwise adversely affect any tax credit or tax credit
2certificate issued, awarded, or allowed before January 1, 2019,
3nor shall it limit, modify, or otherwise adversely affect
4a taxpayer’s right to claim or redeem a tax credit issued,
5awarded, or allowed before January 1, 2019, including but not
6limited to any tax credit carryforward amount. Any amount of
7tax credit that would have been eligible to be claimed by a
8taxpayer on or after January 1, 2019, against the moneys and
9credits tax imposed in section 533.329, Code 2018, shall be
10allowed in the same manner and to the same extent as a credit
11against the franchise tax imposed in chapter 422, division V.
12 Sec. 107. EFFECTIVE DATE. This division of this Act takes
13effect January 1, 2019.
14 Sec. 108. APPLICABILITY. This division of this Act applies
15to tax years beginning on or after January 1, 2019.
16DIVISION V
17CHANGES TO IOWA EDUCATIONAL SAVINGS PLAN TRUST AND IOWA ABLE
18SAVINGS PLAN TRUST
19 Sec. 109. Section 12D.1, Code 2018, is amended to read as
20follows:
2112D.1 Purpose and definitions.
221. The general assembly finds that the general welfare and
23well-being of the state are directly related to educational
24levels and skills of the citizens of the state, and that a
25vital and valid public purpose is served by the creation and
26implementation of programs which encourage and make possible
27the attainment of higher formal education by the greatest
28number of citizens of the state. The state has limited
29resources to provide additional programs for higher education
30funding and the continued operation and maintenance of the
31state’s public institutions of higher education and the general
32welfare of the citizens of the state will be enhanced by
33establishing a program which allows citizens of the state to
34invest money in a public trust for future application to the
35payment of higher education costs qualified education expenses.
-44-1The creation of the means of encouragement for citizens to
2invest in such a program represents the carrying out of a
3vital and valid public purpose. In order to make available
4to the citizens of the state an opportunity to fund future
5higher formal education needs, it is necessary that a public
6trust be established in which moneys may be invested for future
7educational use.
82. As used in this chapter, unless the context otherwise
9requires:
10a. “Account balance limit” means the maximum allowable
11aggregate balance of accounts established for the same
12beneficiary. Account earnings, if any, are included in the
13account balance limit.
14b. “Administrative fund” means the administrative fund
15established under section 12D.4.
16c. “Beneficiary” means the individual designated by a
17participation agreement to benefit from advance payments of
18higher education costs qualified education expenses on behalf
19of the beneficiary.
20d. “Benefits” means the payment of higher education costs
21 qualified education expenses on behalf of a beneficiary by the
22trust during the beneficiary’s attendance at an institution of
23higher education a qualified educational institution.
24e. “Higher education costs” means the same as “qualified
25higher education expenses” as defined insection 529(e)(3) of
26the Internal Revenue Code.
27f. e. “Institution of higher education” means an institution
28described in section 481 of the federal Higher Education Act of
291965, 20 U.S.C. §1088, which is eligible to participate in the
30United States department of education’s student aid programs.
31g. f. “Internal Revenue Code” means the same as defined
32insection 12I.1.
33h. g. “Iowa educational savings plan trust” or “trust” means
34the trust created under section 12D.2.
35i. h. “Participant” means an individual, individual’s legal
-45-1representative, trust, estate, or an organization described
2in section 501(c)(3) of the Internal Revenue Code and exempt
3from taxation under section 501(a) of the Internal Revenue
4Code, that has entered into a participation agreement under
5this chapter for the advance payment of higher education costs
6 qualified education expenses on behalf of a beneficiary.
7j. i. “Participation agreement” means an agreement between
8a participant and the trust entered into under this chapter.
9k. j. “Program fund” means the program fund established
10under section 12D.4.
11k. “Qualified education expenses” means the same as
12“qualified higher education expenses” as defined in section
13529(e)(3) of the Internal Revenue Code, as amended by Pub.L.
14No.115-97, and shall include elementary and secondary school
15expenses for tuition described in section 529(c)(7) of the
16Internal Revenue Code, subject to the limitations imposed by
17section 529(e)(3)(A) of the Internal Revenue Code.
18l. “Qualified educational institution” means an institution
19of higher education, or any elementary or secondary public,
20private, or religious school described in section 529(c)(7) of
21the Internal Revenue Code.
22l. m. “Tuition and fees” “Tuition” means the quarter, or
23 semester, or annual charges imposed to attend an institution
24of higher education a qualified educational institution and
25required as a condition of enrollment or attendance.
26 Sec. 110. Section 12D.2, subsections 2, 5, 9, and 14, Code
272018, are amended to read as follows:
282. Enter into agreements with any institution of higher
29education qualified educational institution, the state, or any
30federal or other state agency, or other entity as required to
31implement this chapter.
325. Carry out studies and projections so the treasurer of
33state may advise participants regarding present and estimated
34future higher education costs qualified education expenses
35 and levels of financial participation in the trust required
-46-1in order to enable participants to achieve their educational
2funding objectives.
39. Make payments to institutions of higher education
4 qualified educational institutions, participants, or
5beneficiaries, pursuant to participation agreements on behalf
6of beneficiaries.
714. Establish, impose, and collect administrative fees
8and charges in connection with transactions of the trust, and
9provide for reasonable service charges, including penalties for
10cancellations and late payments with respect to participation
11agreements.
12 Sec. 111. Section 12D.3, subsections 1 and 2, Code 2018, are
13amended to read as follows:
141. a. Each participation agreement may require a
15participant to agree to invest a specific amount of money in
16the trust for a specific period of time for the benefit of a
17specific beneficiary. A participant shall not be required to
18make an annual contribution on behalf of a beneficiary. The
19maximum contribution that may be deducted for Iowa income tax
20purposes shall not exceed two thousand dollars per beneficiary
21per year adjusted annually to reflect increases in the consumer
22price index. The treasurer of state shall set an account
23balance limit to maintain compliance with section 529 of the
24Internal Revenue Code. A contribution shall not be permitted
25to the extent it causes the aggregate balance of all accounts
26established for the same beneficiary under the trust to exceed
27the applicable account balance limit.
28b. Participation agreements may be amended to provide for
29adjusted levels of payments based upon changed circumstances or
30changes in educational plans.
312. The execution of a participation agreement by the trust
32shall not guarantee in any way that higher education costs
33 qualified education expenses will be equal to projections
34and estimates provided by the trust or that the beneficiary
35named in any participation agreement will attain any of the
-47-1following:
2a. Be admitted to an institution of higher education a
3qualified educational institution.
4b. If admitted, be determined a resident for tuition
5purposes by the institution of higher education qualified
6educational institution.
7c. Be allowed to continue attendance at the institution of
8higher education qualified educational institution following
9admission.
10d. Graduate from the institution of higher education
11 qualified educational institution.
12 Sec. 112. Section 12D.3, Code 2018, is amended by adding the
13following new subsection:
14 NEW SUBSECTION. 5. A participant may designate a successor
15in accordance with rules adopted by the treasurer of state.
16The designated successor shall succeed to the ownership of the
17account in the event of the death of the participant. In the
18event a participant dies and has not designated a successor to
19the account, the following criteria shall apply:
20a. The beneficiary of the account, if eighteen years of
21age or older, shall become the owner of the account as well as
22remain the beneficiary upon filing the appropriate forms in
23accordance with rules adopted by the treasurer of state.
24b. If the beneficiary of the account is under the age of
25eighteen, account ownership shall be transferred to the first
26surviving parent or other legal guardian of the beneficiary to
27file the appropriate forms in accordance with rules adopted by
28the treasurer of state.
29 Sec. 113. Section 12D.4, Code 2018, is amended to read as
30follows:
3112D.4 Program and administrative funds — investment and
32payments.
331. a. The treasurer of state shall segregate moneys
34received by the trust into two funds: the program fund and the
35administrative fund.
-48- 1b. All moneys paid by participants in connection with
2participation agreements shall be deposited as received into
3separate accounts within the program fund.
4c. Contributions to the trust made by participants may only
5be made in the form of cash.
6d. A participant or beneficiary shall not provide investment
7direction regarding program contributions or earnings held by
8the trust may, directly or indirectly, direct the investment of
9any contributions to the trust or any earnings thereon no more
10than two times in a calendar year.
11e. The amount of cash distributions from the trust and all
12other qualified state tuition programs under section 529 of
13the Internal Revenue Code to a beneficiary during any taxable
14year shall, in the aggregate, include no more than ten thousand
15dollars in expenses for tuition in connection with enrollment
16at an elementary or secondary public, private, or religious
17school incurred during the taxable year.
182. Moneys accrued by participants in the program fund of
19the trust may be used for payments to any institution of higher
20education qualified educational institution. Payments can be
21made to the qualified educational institution, the participant,
22or the beneficiary.
23 Sec. 114. Section 12D.6, subsection 1, paragraph a, Code
242018, is amended to read as follows:
25a. A participant retains ownership of all payments made
26under a participation agreement up to the date of utilization
27for payment of higher education costs qualified education
28expenses for the beneficiary.
29 Sec. 115. Section 12D.6, subsections 2, 3, and 5, Code 2018,
30are amended to read as follows:
312. In the event the program is terminated prior to payment
32of higher education costs qualified education expenses for the
33beneficiary, the participant is entitled to a refund of the
34participant’s account balance.
353. The institution of higher education qualified
-49-1educational institution shall obtain ownership of the payments
2made for the higher education costs qualified education
3expenses paid to the institution at the time each payment is
4made to the institution.
55. A participant may transfer ownership rights to another
6eligible individual, including a gift of the ownership rights
7to a minor beneficiary participant, or may transfer funds to
8another plan under the trust or to an ABLE account as permitted
9under section 529(c)(3)(C) of the Internal Revenue Code.
10The transfer shall be made and the property distributed in
11accordance with rules adopted by the treasurer of state or with
12the terms of the participation agreement.
13 Sec. 116. Section 12D.7, Code 2018, is amended to read as
14follows:
1512D.7 Effect of payments on determination of need and
16eligibility for student financial aid.
17A student loan program, student grant program, or other
18program administered by any agency of the state, except as
19may be otherwise provided by federal law or the provisions
20of any specific grant applicable to that law, shall not take
21into account and shall not consider amounts available for
22the payment of higher education costs qualified education
23expenses pursuant to the Iowa educational savings plan trust in
24determining need and eligibility for student aid.
25 Sec. 117. Section 12D.9, subsection 1, paragraph a, Code
262018, is amended to read as follows:
27a. Pursuant to section 12D.3, subsection 1, paragraph “a”,
28a participant may make contributions to an account which is
29established for the purpose of meeting the qualified higher
30 education expenses of the designated beneficiary of the
31account.
32 Sec. 118. Section 422.7, subsection 32, paragraph c, Code
332018, is amended by striking the paragraph and inserting in
34lieu thereof the following:
35c. (1) Add, to the extent previously deducted as a
-50-1contribution to the trust, the amount resulting from a
2withdrawal or transfer made by the taxpayer from the Iowa
3educational savings plan trust for purposes other than any of
4the following:
5(a) The payment of qualified higher education expenses.
6(b) The payment of tuition to an elementary or secondary
7school if the tuition amounts are qualified education expenses.
8(c) A change in beneficiaries under, or transfer to another
9account within, the Iowa educational savings plan trust, or a
10transfer to the Iowa ABLE savings plan trust, provided such
11change or transfer is permitted under section 12D.6, subsection
125.
13(2) For purposes of this paragraph:
14(a) “Elementary or secondary school” means an elementary
15or secondary school in this state which is accredited under
16section 256.11, and adheres to the provisions of the federal
17Civil Rights Act of 1964 and chapter 216.
18(b) “Institution of higher education”, “qualified education
19expenses”, and “tuition” all mean the same as defined in section
2012D.1, subsection 2.
21(c) (i) “Qualified higher education expenses” means the same
22as defined in section 529(e)(3) of the Internal Revenue Code.
23(ii) For purposes of this subparagraph division (c),
24“Internal Revenue Code” means the Internal Revenue Code of
251954, prior to the date of its redesignation as the Internal
26Revenue Code of 1986 by the Tax Reform Act of 1986, or means
27the Internal Revenue Code of 1986 as amended and in effect on
28January 1, 2018. This definition shall not be construed to
29include any amendment to the Internal Revenue Code enacted
30after the date specified in the preceding sentence, including
31any amendment with retroactive applicability or effectiveness.
32 Sec. 119. Section 422.7, subsection 34, Code 2018, is
33amended to read as follows:
3434. a. (1) Subtract the amount contributed during the tax
35year on behalf of a designated beneficiary that is a resident
-51-1of this state to the Iowa ABLE savings plan trust or to the
2qualified ABLE program with which the state has contracted
3pursuant to section 12I.10, not to exceed the maximum
4contribution level established in section 12I.3, subsection 1,
5paragraph “d”, or section 12I.10, subsection 2, paragraph “a”,
6as applicable.
7(2) This paragraph “a” shall not apply to any amount
8of contribution that represents a transfer from the Iowa
9educational savings plan trust created in chapter 12D that
10meets the requirements of subsection 32, paragraph “c”,
11subparagraph (1), subparagraph division (c), and that was
12previously deducted as a contribution to the Iowa educational
13savings plan trust.
14b. Add the amount resulting from the cancellation of a
15participation agreement refunded to the taxpayer as an account
16owner in the Iowa ABLE savings plan trust or the qualified
17ABLE program with which the state has contracted pursuant to
18section 12I.10 to the extent previously deducted pursuant
19to this subsection by the taxpayer or any other person as a
20contribution to the trust or qualified ABLE program, or to the
21extent the amount was previously deducted by the taxpayer or
22any other person pursuant to subsection 32, paragraph “a”, and
23qualified as a transfer under paragraph “a”, subparagraph (2),
24of this subsection.
25c. Add the amount resulting from a withdrawal made by a
26taxpayer from the Iowa ABLE savings plan trust or the qualified
27ABLE program with which the state has contracted pursuant to
28section 12I.10 for purposes other than the payment of qualified
29disability expenses to the extent previously deducted pursuant
30to this subsection by the taxpayer or any other person as a
31contribution to the trust or qualified ABLE program, or to the
32extent the amount was previously deducted by the taxpayer or
33any other person pursuant to subsection 32, paragraph “a”, and
34qualified as a transfer under paragraph “a”, subparagraph (2),
35of this subsection.
-52-1 Sec. 120. Section 627.6, Code 2018, is amended by adding the
2following new subsection:
3 NEW SUBSECTION. 17. The debtor’s interest, whether as
4participant or beneficiary, in contributions and assets,
5including the accumulated earnings and market increases in
6value, held in an account in the Iowa educational savings plan
7trust organized under chapter 12D.
8 Sec. 121. EFFECTIVE DATE. This division of this Act, being
9deemed of immediate importance, takes effect upon enactment.
10 Sec. 122. RETROACTIVE APPLICABILITY.
111. Except as provided in subsection 2, this division of this
12Act applies retroactively to January 1, 2018, for withdrawals
13from the Iowa educational savings plan trust made on or after
14that date.
152. The sections of this division of this Act amending
16section 422.7 apply retroactively to January 1, 2018, for tax
17years beginning on or after that date, and for withdrawals from
18the Iowa educational savings plan trust made on or after that
19date.
20DIVISION VI
21SALES AND USE TAXES
22 Sec. 123. Section 15J.4, subsection 3, paragraph f, Code
232018, is amended to read as follows:
24f. The total aggregate amount of state sales tax revenues
25and state hotel and motel tax revenues that may be approved by
26the board for remittance to all municipalities and that may
27be transferred to the state reinvestment district fund under
28section 423.2, subsection 11, 423.2A or section 423A.6, and
29remitted to all municipalities having a reinvestment district
30under this chapter shall not exceed one hundred million
31dollars.
32 Sec. 124. Section 15J.5, subsection 1, paragraph a, Code
332018, is amended to read as follows:
34a. The department shall calculate quarterly the amount of
35new state sales tax revenues for each district established in
-53-1the state to be deposited in the state reinvestment district
2fund created in section 15J.6, pursuant to section 423.2,
3subsection 11, paragraph “b” 423.2A, subsection 2, subject to
4remittance limitations established by the board pursuant to
5section 15J.4, subsection 3.
6 Sec. 125. Section 15J.6, subsection 1, Code 2018, is amended
7to read as follows:
81. A state reinvestment district fund is established in the
9state treasury under the control of the department consisting
10of the new state sales tax revenues collected within each
11district and deposited in the fund pursuant to section 423.2,
12subsection 11, paragraph “b” 423.2A, subsection 2, and the
13new state hotel and motel tax revenues collected within each
14district and deposited in the fund pursuant to section 423A.6.
15Moneys deposited in the fund are appropriated to the department
16for the purposes of this section. Moneys in the fund shall
17only be used for the purposes of this section.
18 Sec. 126. Section 418.11, subsection 1, Code 2018, is
19amended to read as follows:
201. The department of revenue shall calculate quarterly the
21amount of increased sales tax revenues for each governmental
22entity approved to use sales tax increment revenues and the
23amount of such revenues to be transferred to the sales tax
24increment fund pursuant to section 423.2, subsection 11,
25paragraph “b” 423.2A, subsection 2.
26 Sec. 127. Section 418.12, subsection 1, Code 2018, is
27amended to read as follows:
281. A sales tax increment fund is established as a separate
29and distinct fund in the state treasury under the control of
30the department of revenue consisting of the amount of the
31increased state sales and services tax revenues collected by
32the department of revenue within each applicable area specified
33in section 418.11, subsection 3, and deposited in the fund
34pursuant to section 423.2, subsection 11, paragraph “b” 423.2A,
35subsection 2. Moneys deposited in the fund are appropriated
-54-1to the department of revenue for the purposes of this section.
2Moneys in the fund shall only be used for the purposes of this
3section.
4 Sec. 128. Section 421.26, Code 2018, is amended to read as
5follows:
6421.26 Personal liability for tax due.
7If a licensee or other person under section 452A.65, a
8retailer or purchaser under chapter 423A, 423B, or 423E, or
9section sections 423.14, 423.14A, 423.29, 423.31, 423.32, or
10423.33, or a retailer or purchaser under section 423.32, or
11 a user under section 423.34, or a permit holder or licensee
12under section 453A.13, 453A.16, or 453A.44 fails to pay a tax
13under those sections when due, an officer of a corporation
14or association, notwithstanding section 489.304, a member or
15manager of a limited liability company, or a partner of a
16partnership, having control or supervision of or the authority
17for remitting the tax payments and having a substantial legal
18or equitable interest in the ownership of the corporation,
19association, limited liability company, or partnership, who has
20intentionally failed to pay the tax is personally liable for
21the payment of the tax, interest, and penalty due and unpaid.
22However, this section shall not apply to taxes on accounts
23receivable. The dissolution of a corporation, association,
24limited liability company, or partnership shall not discharge a
25person’s liability for failure to remit the tax due.
26 Sec. 129. Section 423.1, subsection 5, Code 2018, is amended
27to read as follows:
285. “Agricultural production” includes means the commercial
29 production of livestock, milk, honey, eggs, or plants,
30including but not limited to flowering, ornamental, or
31vegetable plants in commercial greenhouses or otherwise,
32and commercial production from aquaculture, and commercial
33 production from silvicultural activities. “Agricultural
34products” includes flowering, ornamental, or vegetable plants
35and those products of aquaculture and silviculture.
-55-1 Sec. 130. Section 423.1, subsection 24, paragraph a, Code
22018, is amended to read as follows:
3a. “Lease or rental” means any transfer of possession or
4control of, or access to, tangible personal property for a
5fixed or indeterminate term for consideration. A “lease or
6rental” may include future options to purchase or extend.
7 Sec. 131. Section 423.1, subsection 37, Code 2018, is
8amended to read as follows:
937. “Place of business” means any warehouse, store,
10place, office, building, or structure where goods, wares, or
11merchandise tangible personal property or services are offered
12for sale at retail or where any taxable amusement is conducted,
13or each office where gas, water, heat, communication, or
14electric services are offered for sale at retail. When a
15retailer or amusement operator sells merchandise by means of
16vending machines or operates music or amusement devices by
17coin-operated machines at more than one location within the
18state, the office, building, or place where the books, papers,
19and records of the taxpayer are kept shall be deemed to be the
20taxpayer’s place of business.
21 Sec. 132. Section 423.1, subsection 47, Code 2018, is
22amended to read as follows:
2347. “Retailer” means and includes every person engaged in
24the business of selling tangible personal property or taxable
25services at retail, or the furnishing of gas, electricity,
26water, or communication service, and tickets or admissions to
27places of amusement and athletic events or operating amusement
28devices or other forms of commercial amusement from which
29revenues are derived. However, when in the opinion of the
30director it is necessary for the efficient administration of
31this chapter to regard any salespersons, representatives,
32truckers, peddlers, or canvassers as agents of the dealers,
33distributors, supervisors, employers, or persons under whom
34they operate or from whom they obtain tangible personal
35property or services sold by them irrespective of whether or
-56-1not they are making sales on their own behalf or on behalf of
2such dealers, distributors, supervisors, employers, or persons,
3the director may so regard them, and may regard such dealers,
4distributors, supervisors, employers, or persons as retailers
5for the purposes of this chapter. “Retailer” includes a seller
6obligated to collect sales or use tax, including any person
7obligated to collect sales and use tax pursuant to section
8423.14A.
9 Sec. 133. Section 423.1, subsection 48, paragraph a, Code
102018, is amended to read as follows:
11a. “Retailer maintaining a place of business in this state”
12or any like term includes any of the following:
13(1) Aretailer having or maintaining within this state,
14directly or by a subsidiary, an office, distribution house,
15sales house, warehouse, or other place of business, or any
16representative operating within this state under the authority
17of the retailer or its subsidiary, irrespective of whether that
18place of business or representative is located here permanently
19or temporarily, or whether the retailer or subsidiary is
20admitted to do business within this state pursuant to chapter
21490.
22(2) A person obligated to collect sales and use tax pursuant
23to section 423.14A.
24 Sec. 134. Section 423.1, subsection 48, paragraph b,
25subparagraph (1), unnumbered paragraph 1, Code 2018, is amended
26to read as follows:
27A retailer shall be presumed to be maintaining a place of
28business in this state, as defined in for purposes of paragraph
29“a”, subparagraph (1), if any person that has substantial nexus
30in this state, other than a person acting in its capacity as a
31common carrier, does any of the following:
32 Sec. 135. Section 423.1, subsection 48, paragraph b,
33subparagraph (1), subparagraph division (b), Code 2018, is
34amended to read as follows:
35(b) Maintains an office, distribution facility, warehouse,
-57-1storage place, or similar place of business in this state to
2facilitate the delivery of personal property or services sold
3by the retailer to the retailer’s customers.
4 Sec. 136. Section 423.1, subsection 50, Code 2018, is
5amended to read as follows:
650. “Sales” or “sale” means any transfer, exchange, or
7barter, conditional or otherwise, in any manner or by any means
8whatsoever, for consideration, including but not limited to any
9such transfer, exchange, or barter on a subscription basis.
10 Sec. 137. Section 423.1, Code 2018, is amended by adding the
11following new subsection:
12 NEW SUBSECTION. 55A. “Sold at retail in the state” and
13other references to sales “in the state” or “in this state”
14includes but is not limited to sales sourced to this state
15under this chapter.
16 Sec. 138. Section 423.1, Code 2018, is amended by adding the
17following new subsection:
18 NEW SUBSECTION. 57A. “Subscription” means any arrangement
19in which a person has the right or ability to access, receive,
20use, obtain, purchase, or otherwise acquire tangible personal
21property or services on a permanent or less than permanent
22basis, regardless of whether the person actually accesses,
23receives, uses, obtains, purchases, or otherwise acquires such
24tangible personal property or service.
25 Sec. 139. Section 423.1, subsections 62, 63, and 64, Code
262018, are amended to read as follows:
2762. “Use” means and includes the exercise by any person of
28any right or power over or access to tangible personal property
29incident to the ownership of that property, or any right or
30power over or access to the product or result of a service.
31A retailer’s or building contractor’s sale of manufactured
32housing for use in this state, whether in the form of tangible
33personal property or of realty, is a use of that property for
34the purposes of this chapter.
3563. “Use tax” means the tax levied under subchapter III of
-58-1this chapter for which the retailer collects and remits tax to
2the department.
364. “User” means the immediate recipient of the personal
4property or services who is entitled to exercise a right of or
5 power over or access to the personal property, or the product
6or result of such services.
7 Sec. 140. Section 423.2, subsection 1, paragraph a,
8subparagraph (1), Code 2018, is amended to read as follows:
9(1) Sales of engraving, photography, retouching, printing,
10and binding services.
11 Sec. 141. Section 423.2, subsection 6, Code 2018, is amended
12to read as follows:
136. a. The sales price of any of the following enumerated
14services is subject to the tax imposed by subsection 5:
15a. alteration Alteration and garment repair; armored.
16b. Armoredcar; vehicle.
17c. Vehiclerepair; battery.
18d. Battery, tire, and allied; investment.
19e. Investmentcounseling; service.
20f. Servicecharges of all financial institutions; barber.
21For the purposes of this paragraph, “financial institutions”
22 means all national banks, federally chartered savings and loan
23associations, federally chartered savings banks, federally
24chartered credit unions, banks organized under chapter 524,
25credit unions organized under chapter 533, and all banks,
26savings banks, credit unions, and savings and loan associations
27chartered or otherwise created under the laws of any state and
28doing business in Iowa.
29g. Barberand beauty; boat.
30h. Boatrepair; vehicle.
31i. Vehicle wash and wax; campgrounds; carpentry; roof.
32j. Campgrounds.
33k. Carpentry.
34l. Roof, shingle, and glass repair; dance.
35m. Danceschools and dance studios; dating.
-59- 1n. Datingservices; dry.
2o. Drycleaning, pressing, dyeing, and laundering excluding
3the use of self-pay washers and dryers; electrical.
4p. Electricaland electronic repair and installation;
5excavating.
6q. Excavatingand grading; farm.
7r. Farmimplement repair of all kinds; flying.
8s. Flyingservice; furniture.
9t. Furniture, rug, carpet, and upholstery repair and
10cleaning; fur.
11u. Furstorage and repair; golf.
12v. Golfand country clubs and all commercial recreation;
13gun.
14w. Gunand camera repair; house.
15x. Houseand building moving; household.
16y. Householdappliance, television, and radio repair;
17janitorial.
18z. Janitorialand building maintenance or cleaning; jewelry.
19aa. Jewelryand watch repair; lawn.
20ab. Lawncare, landscaping, and tree trimming and removal;.
21ac. Personal transportation service, including but not
22limited to taxis, driver service, ride sharing service, rides
23for hire, andlimousine service, including driver; machine.
24ad. Machineoperator; machine.
25ae. Machinerepair of all kinds; motor.
26af. Motorrepair; motorcycle.
27ag. Motorcycle, scooter, and bicycle repair; oilers.
28ah. Oilersand lubricators; office.
29ai. Officeand business machine repair; painting.
30aj. Painting, papering, and interior decorating; parking.
31ak. Parkingfacilities; pay.
32al. Pay television; pet.>
33am. Petgrooming; pipe.
34an. Pipefitting and plumbing; wood.
35ao. Woodpreparation; executive.
-60- 1ap. Executivesearch agencies; private.
2aq. Privateemployment agencies, excluding services for
3placing a person in employment where the principal place of
4employment of that person is to be located outside of the
5state; reflexology; security.
6ar. Reflexology.
7as. Securityand detective services, excluding private
8security and detective services furnished by a peace officer
9with the knowledge and consent of the chief executive officer
10of the peace officer’s law enforcement agency; sewage.
11at. Sewageservices for nonresidential commercial
12operations; sewing.
13au. Sewingand stitching; shoe.
14av. Shoerepair and shoeshine; sign.
15aw. Signconstruction and installation; storage.
16ax. Storageof household goods, mini-storage, and
17warehousing of raw agricultural products; swimming.
18ay. Swimmingpool cleaning and maintenance; tanning.
19az. Tanningbeds or salons; taxidermy.
20ba. Taxidermyservices; telephone.
21bb. Telephoneanswering service; test.
22bc. Testlaboratories, including mobile testing laboratories
23and field testing by testing laboratories, and excluding tests
24on humans or animals and excluding environmental testing
25services; termite.
26bd. Termite, bug, roach, and pest eradicators; tin.
27be. Tinand sheet metal repair; transportation.
28bf. Transportationservice consisting of the rental of
29recreational vehicles or recreational boats, or the rental of
30vehicles subject to registration which are registered for a
31gross weight of thirteen tons or less for a period of sixty
32days or less, or the rental of aircraft for a period of sixty
33days or less;.
34bg. Turkish baths, massage, and reducing salons, excluding
35services provided by massage therapists licensed under chapter
-61-1152C; water.
2bh. Waterconditioning and softening; weighing; welding;
3well.
4bi. Weighing.
5bj. Welding.
6bk. Welldrilling; wrapping.
7bl. Wrapping, packing, and packaging of merchandise other
8than processed meat, fish, fowl, and vegetables; wrecking.
9bm. Wreckingservice; wrecker.
10bn. Wreckerand towing.
11b. For the purposes of this subsection, “financial
12institutions” means all national banks, federally chartered
13savings and loan associations, federally chartered savings
14banks, federally chartered credit unions, banks organized under
15chapter 524, credit unions organized under chapter 533, and
16all banks, savings banks, credit unions, and savings and loan
17associations chartered or otherwise created under the laws of
18any state and doing business in Iowa.
19bo. Photography.
20bp. Retouching.
21 Sec. 142. Section 423.2, subsection 8, Code 2018, is amended
22by adding the following new paragraph:
23 NEW PARAGRAPH. d. A transaction that otherwise meets
24the definition of “bundled transaction” as defined in this
25subsection is not a bundled transaction if it is any of the
26following:
27(1) The retail sale of tangible personal property and a
28service where the tangible personal property is essential
29to the use of the service, and is provided exclusively in
30connection with the service, and the true object of the
31transaction is the service.
32(2) The retail sale of services where one service is
33provided that is essential to the use or receipt of a second
34service and the first service is provided exclusively in
35connection with the second service and the true object of the
-62-1transaction is the second service.
2(3) (a) A transaction that includes taxable products and
3nontaxable products and the purchase price or sales price of
4the taxable products is de minimis.
5(b) For purposes of this subparagraph, “de minimis” means
6the seller’s purchase or sales price of the taxable products
7is ten percent or less of the total purchase price or sales
8price of the bundled products. Sellers shall use either the
9purchase price or the sale price of the products to determine
10if the taxable products are de minimis. Sellers may not use
11a combination of the purchase price and sales price of the
12products to determine if the taxable products are de minimis.
13(4) The retail sale of exempt tangible personal property and
14taxable tangible personal property where all of the following
15apply:
16(a) The transaction includes food and food ingredients,
17drugs, durable medical equipment, mobility enhancing equipment,
18prosthetic devices, or medical supplies.
19(b) The seller’s purchase price or sales price of the
20taxable tangible personal property is fifty percent or less
21of the total purchase price or sales price of the bundled
22tangible personal property. Sellers may not use a combination
23of the purchase price and sales price of the tangible personal
24property when making the fifty percent determination for a
25transaction.
26 Sec. 143. Section 423.2, subsections 10, 11, and 12, Code
272018, are amended by striking the subsections.
28 Sec. 144. NEW SECTION. 423.2A Deposit and transfer of
29revenues.
301. a. All revenues arising under the operation of the
31provisions of this subchapter II shall be deposited into the
32general fund of the state.
33b. Subsequent to the deposit into the general fund of
34the state, the director shall credit an amount equal to the
35product of the sales tax rate imposed in section 423.2 times
-63-1the sales price of the tangible personal property or services
2furnished to purchasers at a baseball and softball complex that
3has received an award under section 15F.207 and that meets
4the qualifications of section 423.4, subsection 10, into the
5baseball and softball complex sales tax rebate fund created
6under section 423.4, subsection 10, paragraph “e”. The director
7shall credit the moneys beginning the first day of the quarter
8following July 1, 2016. This paragraph is repealed thirty
9days following the date on which five million dollars in total
10rebates have been provided under section 423.4, subsection 10.
112. Subsequent to the deposit into the general fund of the
12state pursuant to subsection 1, the department shall do the
13following in the order prescribed:
14a. Transfer the revenues collected under chapter 423B.
15b. Transfer from the remaining revenues the amounts required
16under Article VII, section 10, of the Constitution of the State
17of Iowa to the natural resources and outdoor recreation trust
18fund created in section 461.31, if applicable.
19c. Transfer one-sixth of the remaining revenues to the
20secure an advanced vision for education fund created in section
21423F.2. This paragraph “c” is repealed December 31, 2029.
22d. Transfer to the baseball and softball complex sales tax
23rebate fund that portion of the sales tax receipts described
24in subsection 1, paragraph “b”, remaining after the transfers
25required under paragraphs “a”, “b”, and “c” of this subsection
262. This paragraph is repealed thirty days following the date
27on which five million dollars in total rebates have been
28provided under section 423.4, subsection 10.
29e. Beginning the first day of the calendar quarter
30beginning on the reinvestment district’s commencement date,
31subject to remittance limitations established by the economic
32development authority board pursuant to section 15J.4,
33subsection 3, transfer to a district account created in the
34state reinvestment district fund for each reinvestment district
35established under chapter 15J, the amount of new state sales
-64-1tax revenue, determined in section 15J.5, subsection 1,
2paragraph “b”, in the district, that remains after the prior
3transfers required under this subsection 2. Such transfers
4shall cease pursuant to section 15J.8.
5f. Subject to the limitation on the calculation and
6deposit of sales tax increment revenues in section 418.12,
7beginning the first day of the quarter following adoption
8of the resolution pursuant to section 418.4, subsection 3,
9paragraph “d”, transfer to the account created in the sales tax
10increment fund for each governmental entity approved to use
11sales tax increment revenues under chapter 418, that portion
12of the increase in sales tax revenue, determined in section
13418.11, subsection 2, paragraph “d”, in the applicable area of
14the governmental entity, that remains after the other transfers
15required under this subsection 2.
16g. Beginning the first day of the quarter following July
171, 2014, transfer to the raceway facility tax rebate fund
18created in section 423.4, subsection 11, paragraph “e”, that
19portion of the sales tax receipts collected and remitted upon
20sales of tangible personal property or services furnished by
21retailers at a raceway facility meeting the qualifications of
22section 423.4, subsection 11, that remains after the transfers
23required in paragraphs “a” through “f” of this subsection
242. This subparagraph is repealed June 30, 2025, or thirty
25days following the date on which an amount of total rebates
26specified in section 423.4, subsection 11, paragraph “c”,
27subparagraph (4), subparagraph division (a) or (b), whichever
28is applicable, has been provided or thirty days following the
29date on which rebates cease as provided in section 423.4,
30subsection 11, paragraph “c”, subparagraph (5), whichever is
31earliest.
323. Of the amount of sales tax revenue actually transferred
33per quarter pursuant to subsection 2, paragraphs “e” and “f”,
34the department shall retain an amount equal to the actual cost
35of administering the transfers under subsection 2, paragraphs
-65-1“e” and “f”, or twenty-five thousand dollars, whichever is
2less. The amount retained by the department pursuant to this
3subsection shall be divided pro rata each quarter between
4the amounts that would have been transferred pursuant to
5subsection 2, paragraphs “e” and “f”, without the deduction
6made by operation of this subsection. Revenues retained by
7the department pursuant to this subsection shall be considered
8repayment receipts as defined in section 8.2.
9 Sec. 145. Section 423.3, subsections 2 and 17, Code 2018,
10are amended to read as follows:
112. The sales price of sales for resale of tangible personal
12property or taxable services, or for resale of tangible
13personal property in connection with the furnishing of taxable
14services, except for sales, the following:
15a. Sales,other than leases or rentals, which are sales
16to nonqualified dealers of machinery, equipment, attachments,
17and replacement parts specifically enumerated in subsection 37
18and used in the manner described in subsection 37 or the. For
19purposes of this paragraph, “nonqualified dealer” means any
20dealer who is not a party to a dealership agreement, as those
21terms are defined in section 322F.1.
22b. Thepurchase of tangible personal property, the leasing
23or rental of which is exempted from tax by subsection 49.
2417. The sales price of all goods, wares, or merchandise,
25 tangible personal property or services, used for educational
26purposes sold to any private nonprofit educational institution
27in this state. For the purpose of this subsection, “educational
28institution” means an institution which primarily functions
29as a school, college, or university with students, faculty,
30and an established curriculum. The faculty of an educational
31institution must be associated with the institution and the
32curriculum must include basic courses which are offered every
33year. “Educational institution” includes an institution
34primarily functioning as a library.
35 Sec. 146. Section 423.3, subsection 3, Code 2018, is amended
-66-1by striking the subsection and inserting in lieu thereof the
2following:
33. a. The sales price of tangible personal property used
4primarily in agricultural production by a commercial farmer
5if the cost of the tangible personal property is properly
6claimed as a business deduction for purposes of chapter 422 and
7the tangible personal property is used on land eligible for
8the agricultural land credit created in chapter 426. If the
9other requirements of this subsection are satisfied, “tangible
10personal property” includes but is not limited to the following:
11(1) Farm machinery and equipment, including supplies,
12replacement parts, and auxiliary attachments which improve the
13performance, safety, operation, or efficiency of the machinery
14and equipment.
15(2) Agricultural breeding livestock, domesticated fowl,
16preserve whitetail as defined in section 484C.1, and draft
17horses.
18b. Vehicles subject to registration, as defined in section
19423.1, and replacement parts for such vehicles, are not exempt
20under paragraph “a” of this subsection.
21 Sec. 147. Section 423.3, subsections 3A, 4, 5, 6, 7, 8,
229, 10, 11, 12, 13, 14, 15, and 16, Code 2018, are amended by
23striking the subsections.
24 Sec. 148. Section 423.3, subsections 21, 22, and 31, Code
252018, are amended to read as follows:
2621. The sales price of goods, wares, or merchandise,
27 tangible personal property or of services, used for
28educational, scientific, historic preservation, or aesthetic
29purpose sold to a nonprofit private museum.
3022. The sales price from sales of goods, wares, or
31merchandise, tangible personal property or from services
32furnished, to a nonprofit private art center to be used in the
33operation of the art center.
3431. a. The sales price of goods, wares, or merchandise
35 tangible personal property sold to and of services furnished,
-67-1and used for public purposes sold to a tax-certifying or
2tax-levying body of the state or a governmental subdivision
3of the state, including regional transit systems, as defined
4in section 324A.1, the state board of regents, department
5of human services, state department of transportation, any
6municipally owned solid waste facility which sells all or part
7of its processed waste as fuel to a municipally owned public
8utility, and all divisions, boards, commissions, agencies,
9or instrumentalities of state, federal, county, or municipal
10government which have no earnings going to the benefit of an
11equity investor or stockholder, except any of the following:
12(1) a. The sales price of goods, wares, or merchandise
13 tangible personal property sold to, or of services furnished,
14and used by or in connection with the operation of any
15municipally owned public utility engaged in selling gas,
16electricity, heat, pay television service, or communication
17service to the general public.
18(2) b. The sales price of furnishing of sewage services to
19a county or municipality on behalf of nonresidential commercial
20operations.
21(3) c. The furnishing of solid waste collection and
22disposal service to a county or municipality on behalf of
23nonresidential commercial operations located within the county
24or municipality.
25b. The exemption provided by this subsection shall also
26apply to all such sales of goods, wares, or merchandise or of
27services furnished and subject to use tax.
28 Sec. 149. Section 423.3, subsection 47, paragraph d,
29subparagraph (4), Code 2018, is amended by striking the
30subparagraph and inserting in lieu thereof the following:
31(4) (a) “Manufacturer” means a business that primarily
32purchases, receives, or holds personal property of any
33description for the purpose of adding to its value by a process
34of manufacturing with a view to selling the property for gain
35or profit.
-68- 1(b) “Manufacturer” includes contract manufacturers. A
2contract manufacturer is a manufacturer that otherwise falls
3within the definition of manufacturer, except that a contract
4manufacturer does not sell the tangible personal property
5the contract manufacturer processes on behalf of other
6manufacturers.
7(c) For purposes of this subparagraph, “business” means
8those businesses conducted for profit, but excludes professions
9and occupations and nonprofit organizations.
10(d) For purposes of this subparagraph, “manufacturing”
11means those activities commonly understood within the ordinary
12meaning of the term, and shall include:
13(i) Refining.
14(ii) Purifying.
15(iii) Combining of different materials.
16(iv) Packing of meats.
17(v) Activities subsequent to the extractive process of
18quarrying or mining, such as crushing, washing, sizing, or
19blending of aggregate materials.
20(e) “Manufacturer” does not include persons who are not
21commonly understood as manufacturers, including but not limited
22to persons engaged in any of the following activities:
23(i) Construction contracting.
24(ii) Repairing tangible personal property or real property.
25(iii) Providing health care.
26(iv) Farming, including cultivating agricultural products
27and raising livestock.
28(v) Transporting for hire.
29(vi) Making retail sales to consumers.
30 Sec. 150. Section 423.3, subsection 63, Code 2018, is
31amended to read as follows:
3263. The sales price from the sale of tangible personal
33property or services which will be given as prizes to players
34in games of skill, games of chance, raffles, and bingo games as
35defined in chapter 99B.
-69-1 Sec. 151. Section 423.3, subsection 78, paragraph a,
2unnumbered paragraph 1, Code 2018, is amended to read as
3follows:
4The sales price from sales or rental the sale of tangible
5personal property, or services rendered by any entity where
6the profits from the sales or rental sale of the tangible
7personal property, or services rendered, are used by or donated
8to a nonprofit entity that is exempt from federal income
9taxation pursuant to section 501(c)(3) of the Internal Revenue
10Code, a government entity, or a nonprofit private educational
11institution, and where the entire proceeds from the sales,
12rental, sale or services are expended for any of the following
13purposes:
14 Sec. 152. Section 423.3, subsection 79, Code 2018, is
15amended to read as follows:
1679. The sales price from the sale or rental of tangible
17personal property or from services furnished, to a recognized
18community action agency as provided in section 216A.93 to be
19used for the purposes of the agency.
20 Sec. 153. Section 423.3, Code 2018, is amended by adding the
21following new subsection:
22 NEW SUBSECTION. 103. The sales price from the sale of a
23grain bin or materials used to construct a grain bin. For
24purposes of this subsection, “grain bin” means property that is
25vented and covered with corrugated metal or similar material,
26and that is primarily used to hold loose grain for drying or
27storage.
28 Sec. 154. Section 423.4, subsection 3, unnumbered paragraph
291, Code 2018, is amended to read as follows:
30A relief agency may apply to the director for refund of the
31amount of sales or use tax imposed and paid upon sales to it of
32any goods, wares, merchandise, tangible personal property or
33services furnished, used for free distribution to the poor and
34needy.
35 Sec. 155. Section 423.4, subsection 3, paragraph a,
-70-1subparagraph (1), Code 2018, is amended to read as follows:
2(1) On forms furnished by the department, and filed within
3the time as the director shall provide by rule, the relief
4agency shall report to the department the total amount or
5amounts, valued in money, expended directly or indirectly
6for goods, wares, merchandise, tangible personal property or
7services furnished, used for free distribution to the poor and
8needy.
9 Sec. 156. Section 423.4, subsection 10, paragraph e, Code
102018, is amended to read as follows:
11e. There is established within the state treasury under the
12control of the department a baseball and softball complex sales
13tax rebate fund consisting of the amount of state sales tax
14revenues transferred pursuant to section 423.2, subsection 11,
15paragraph “b”, subparagraph (4) 423.2A, subsection 2, paragraph
16“d”. An account is created within the fund for each baseball
17and softball complex receiving an award under section 15F.207
18and meeting the qualifications of this subsection. Moneys
19in the fund shall only be used to provide rebates of state
20sales tax pursuant to this subsection, and only the state sales
21tax revenues in the baseball and softball complex rebate fund
22are subject to rebate under this subsection. The amount of
23rebates paid from each baseball and softball complex’s account
24within the fund shall not exceed the amount of the award under
25section 15F.207, and not more than five million dollars in
26total rebates shall be paid from the fund. Any moneys in the
27fund which represent state sales tax revenue for which the time
28period in paragraph “c” for receiving a rebate has expired,
29or which otherwise represent state sales tax revenue that has
30become ineligible for rebate pursuant to this subsection, shall
31immediately revert to the general fund of this state.
32 Sec. 157. Section 423.4, subsection 11, paragraph b,
33subparagraph (1), Code 2018, is amended to read as follows:
34(1) Sales tax imposed and collected by retailers upon
35sales of tangible personal property or services furnished to
-71-1purchasers at the raceway facility. Notwithstanding the state
2sales tax imposed in section 423.2, a sales tax rebate issued
3pursuant to this subparagraph shall not exceed the amounts
4transferred to the raceway facility tax rebate fund pursuant to
5section 423.2, subsection 11, paragraph “b”, subparagraph (7)
6 423.2A, subsection 2, paragraph “g”.
7 Sec. 158. Section 423.4, subsection 11, paragraph b,
8subparagraph (2), subparagraph division (c), Code 2018, is
9amended to read as follows:
10(c) Notwithstanding the state sales tax imposed in section
11423.2, a sales tax rebate issued pursuant to this subparagraph
12shall not exceed the amounts remaining after the transfers
13required under section 423.2, subsection 11, paragraph “b”,
14subparagraphs (1) through (6) 423.2A, subsection 2, paragraphs
15“a” through “f”, have been made from the total amount of sales
16tax for which the rebate is requested.
17 Sec. 159. Section 423.4, subsection 11, paragraph e, Code
182018, is amended to read as follows:
19e. There is established within the state treasury under
20the control of the department a raceway facility tax rebate
21fund consisting of the amount of state sales tax revenues
22transferred pursuant to section 423.2, subsection 11, paragraph
23“b”, subparagraph (7) 423.2A, subsection 2, paragraph “g”. An
24account is created within the fund for each raceway facility
25meeting the qualifications of this subsection. Moneys in the
26fund shall only be used to provide rebates of state sales tax
27pursuant to paragraph “b”, subparagraph (1). The total amount
28of rebates paid from the fund shall not exceed the amount
29specified in paragraph “c”, subparagraph (4), subparagraph
30division (a) or (b), whichever is applicable. Any moneys in
31the fund which represent state sales tax revenue for which the
32time period in paragraph “c” for receiving a rebate has expired,
33or which otherwise represent state sales tax revenue that has
34become ineligible for rebate pursuant to this subsection shall
35immediately revert to the general fund of the state.
-72-1 Sec. 160. Section 423.5, subsection 1, paragraph a, Code
22018, is amended to read as follows:
3a. The use in this state of tangible personal property
4as defined in section 423.1, including aircraft subject to
5registration under section 328.20, purchased for use in this
6state. For the purposes of this subchapter, the furnishing
7or use of the following services is also treated as the use
8of tangible personal property: optional service or warranty
9contracts, except residential service contracts regulated under
10chapter 523C, vulcanizing, recapping, or retreading services,
11engraving, photography, retouching, printing, or binding
12services, and communication service when furnished or delivered
13to consumers or users within this state.
14 Sec. 161. Section 423.14, subsection 2, paragraph b, Code
152018, is amended to read as follows:
16b. The tax upon the use of all tangible personal property
17other than that enumerated in paragraph “a”, which is sold by
18a seller who is a retailer maintaining a place of business
19in this state, or by such other retailer or agent as the
20director shall authorize pursuant to section 423.30 or its
21agent that is not otherwise required to collect sales tax under
22the provisions of this chapter, shall be collected by the
23retailer or agent and remitted to the department, pursuant to
24the provisions of paragraph “e”, and sections 423.24, 423.29,
25423.30, 423.32, and 423.33.
26 Sec. 162. NEW SECTION. 423.14A Persons required to collect
27sales and use tax — supplemental conditions, requirements, and
28responsibilities.
291. For purposes of this section, “Iowa sales” means sales of
30tangible personal property, services, or digital goods sourced
31to this state pursuant to section 423.15, 423.16, 423.17,
32423.19, or 423.20, or that are otherwise sold in this state or
33for delivery into this state.
342. In addition to and not in lieu of any application of
35this chapter to sellers who are retailers and sellers who are
-73-1retailers maintaining a place of business in this state, any
2person described in subsection 3, or the person’s agents,
3shall be considered a retailer in this state and a retailer
4maintaining a place of business in this state for purposes of
5this chapter on or after January 1, 2019, and shall be subject
6to all requirements of this chapter imposed on retailers and
7retailers maintaining a place of business in this state,
8including but not limited to the requirement to collect and
9remit sales and use taxes pursuant to sections 423.14 and
10423.29, and local option taxes under chapter 423B.
113. a. A retailer that has gross revenue from Iowa sales
12equal to or exceeding one hundred thousand dollars for the
13immediately preceding calendar year or the current calendar
14year.
15b. A retailer that makes Iowa sales in two hundred or more
16separate transactions for the immediately preceding calendar
17year or the current calendar year.
18c. (1) A retailer that owns, licenses, or uses software
19or data files that are installed or stored on property used
20in this state. For purposes of this subparagraph, “software
21or data files” include but are not limited to software that is
22affirmatively downloaded by a user, software that is downloaded
23as a result of the use of a website, preloaded software, and
24cookies.
25(2) A retailer that uses in-state software to make Iowa
26sales. For purposes of this subparagraph, “in-state software”
27means computer software that is stored on property located in
28this state or that is distributed within this state for the
29purpose of facilitating a sale by the retailer.
30(3) A retailer that provides, or enters into an agreement
31with another person to provide, a content distribution network
32in this state to facilitate, accelerate, or enhance the
33delivery of the retailer’s internet site to purchasers. For
34purposes of this subparagraph, “content distribution network”
35means a system of distributed servers that deliver internet
-74-1sites and other internet content to a user based on the
2geographic location of the user, the origin of the internet
3site or internet content, and a content delivery server.
4(4) This paragraph “c” shall not apply to a retailer that
5has gross revenue from Iowa sales of less than one hundred
6thousand dollars for the immediately preceding calendar year
7or the current calendar year.
8d. (1) A retailer that makes Iowa sales through a
9marketplace provider. This subparagraph shall not apply to a
10retailer that has gross revenue from Iowa sales of less than
11ten thousand dollars for the immediately preceding calendar
12year or the current calendar year.
13(2) A marketplace provider that makes or facilitates Iowa
14sales for one or more retailers equal to or exceeding one
15hundred thousand dollars, or in two hundred or more separate
16transactions, for the immediately preceding calendar year or
17the current calendar year.
18(3) Retailers and marketplace providers subject to this
19paragraph may enter into agreements regarding the fulfillment
20of the requirements of this chapter.
21(4) A marketplace provider shall collect sales and use tax
22on the entire sales price or purchase price paid by a purchaser
23on each Iowa sale made or facilitated by the marketplace
24provider that is subject to sales and use tax, regardless of
25the amount of the sales price or purchase price that will
26ultimately accrue to or benefit the marketplace provider,
27another retailer, or any other person. This sales and use tax
28collection responsibility of a marketplace provider applies but
29shall not be limited to sales facilitated through a computer
30software application, commonly referred to as in-app purchases,
31or through another digital good.
32(5) A marketplace provider shall be relieved of liability
33under this paragraph “d” for failure to collect and remit sales
34and use tax on an Iowa sale made or facilitated for a retailer
35under the following circumstances:
-75- 1(a) If the marketplace provider demonstrates to the
2satisfaction of the department that the failure to collect and
3remit the correct tax was due to incorrect or insufficient
4information provided to the marketplace provider by the
5retailer. This subparagraph division does not apply if a
6marketplace provider and a retailer are affiliates. For Iowa
7sales for which a marketplace provider is relieved of liability
8under this subparagraph division, the retailer or purchaser are
9solely liable for any amount of uncollected or unpaid tax.
10(b) (i) Subject to the limitation in subparagraph
11subdivision (ii), if the marketplace provider demonstrates
12to the satisfaction of the department that the Iowa sale was
13made or facilitated for a retailer prior to January 1, 2026,
14through a platform or other marketplace of the marketplace
15provider, that the marketplace provider and the retailer are
16not affiliates, and that the failure to collect sales and
17use tax was not due to an error in sourcing the sale. To the
18extent that a marketplace provider is relieved of liability
19for collection of sales and use tax under this subparagraph
20division, the retailer for whom the marketplace provider
21has made or facilitated the Iowa sale is also relieved of
22liability. The department may determine the manner in which
23a marketplace provider or retailer shall claim the liability
24relief provided in this subparagraph division.
25(ii) The liability relief provided in subparagraph
26subdivision (i) shall not exceed the following percentage
27of the total sales and use tax due on Iowa sales made or
28facilitated by a marketplace provider for retailers and sourced
29to this state during a calendar year:
30(A) For Iowa sales made or facilitated during the 2019
31calendar year, ten percent.
32(B) For Iowa sales made or facilitated during calendar years
332020 through 2024, five percent.
34(C) For Iowa sales made or facilitated during the 2025
35calendar year, three percent.
-76- 1(6) (a) For purposes of this paragraph, “marketplace
2provider” means a person who facilitates a retail sale by
3satisfying subparagraph divisions (i) and (ii) as follows:
4(i) The person directly or indirectly does any of the
5following:
6(A) Lists, makes available, or advertises tangible personal
7property, services, or digital goods for sale by a retailer in
8any forum.
9(B) Transmits or otherwise communicates an offer or
10acceptance of a retail sale of tangible personal property,
11services, or digital goods between a retailer and a purchaser.
12(C) Owns, rents, licenses, makes available, or operates
13any electronic or physical infrastructure or any property,
14process, method, copyright, trademark, or patent that connects
15retailers to purchasers for the purpose of making retail sales
16of tangible personal property, services, or digital goods.
17(D) Provides a platform or other marketplace for making
18retail sales of tangible personal property, services, or
19digital goods, or otherwise facilitates retail sales of
20tangible personal property, services, or digital goods,
21regardless of ownership or control of the tangible personal
22property, services, or digital goods that are the subject of
23the retail sale.
24(E) Provides software development or research and
25development activities related to any activity described in
26this subparagraph subdivision (i), if such software development
27or research and development activities are directly related
28to the physical or electronic marketplace provided by a
29marketplace provider.
30(F) Provides or offers fulfillment or storage services for
31a retailer.
32(G) Sets prices for a retailer’s sale of tangible personal
33property, services, or digital goods.
34(H) Provides or offers customer service to a retailer or
35a retailer’s customers, or accepts or assists with returns or
-77-1exchanges of tangible personal property, services, or digital
2goods sold by a retailer.
3(ii) The person directly or indirectly does any of the
4following:
5(A) Collects the sales price or purchase price of a retail
6sale of tangible personal property, services, or digital goods.
7(B) Provides payment processing services for a retail sale
8of tangible personal property, services, or digital goods.
9(C) Charges, collects, or otherwise receives selling fees,
10listing fees, referral fees, closing fees, fees for inserting
11or making available tangible personal property, services, or
12digital goods on a marketplace, or other consideration from the
13facilitation of a retail sale of tangible personal property,
14services, or digital goods, regardless of ownership or control
15of the tangible personal property, services, or digital goods
16that are the subject of the retail sale.
17(D) Through terms and conditions, agreements, or
18arrangements with a third party, collects payment in connection
19with a retail sale of tangible personal property, services,
20or digital goods from a purchaser and transmits that payment
21to the retailer, regardless of whether the person collecting
22and transmitting such payment receives compensation or other
23consideration in exchange for the service.
24(E) Provides a virtual currency that purchasers are allowed
25or required to use to purchase tangible personal property,
26services, or digital goods.
27(b) For purposes of this paragraph, “marketplace provider”
28includes but is not limited to a digital distribution service,
29digital distribution platform, online portal, or an application
30store.
31e. (1) A referrer if Iowa sales result from referrals from
32a platform of the referrer. A referrer is not required to
33collect and remit sales and use tax pursuant to this paragraph
34if the referrer does all of the following:
35(a) The referrer posts a conspicuous notice on each platform
-78-1of the referrer that includes all of the following:
2(i) A statement that sales or use tax is due on certain
3purchases.
4(ii) A statement that the retailer from whom the person is
5purchasing on the platform may not collect and remit sales and
6use tax on a purchase.
7(iii) A statement that Iowa requires the purchaser to pay
8sales or use tax and file sales or use tax returns if sales
9or use tax is not collected at the time of the sale by the
10retailer.
11(iv) Information informing the purchaser that the notice is
12provided under the requirements of this subparagraph.
13(v) Instructions for obtaining additional information from
14the department regarding whether and how to remit sales and use
15tax to the state of Iowa.
16(b) The referrer provides a monthly notice to each retailer
17to whom the referrer made a referral of a potential customer
18located in Iowa during the previous calendar year, which
19monthly notice shall contain all of the following:
20(i) A statement that Iowa imposes a sales or use tax on Iowa
21sales.
22(ii) A statement that a retailer making Iowa sales must
23collect and remit sales and use tax.
24(iii) Instructions for obtaining additional information
25from the department regarding the collection and remittance of
26Iowa sales and use tax.
27(c) The referrer provides the department with monthly
28reports in an electronic format and in the manner prescribed
29by the department, which monthly reports contain all of the
30following:
31(i) A list of retailers who received the referrer’s notice
32under subparagraph division (b).
33(ii) A list of retailers that collect and remit Iowa sales
34and use tax and that list or advertise the retailer’s products
35for sale on a platform of the referrer.
-79- 1(iii) An affidavit signed under penalty of perjury from
2an officer of the referrer affirming that the referrer made
3reasonable efforts to comply with the applicable sales and use
4tax notice and reporting requirements of this subparagraph.
5(2) For purposes of this paragraph:
6(a) “Platform” means an electronic or physical medium,
7including but not limited to an internet site or catalog,
8operated by a referrer.
9(b) “Referral” means the transfer through telephone,
10internet link, or other means by a referrer of a potential
11customer to a retailer who advertises or lists products for
12sale on a platform of the referrer.
13(c) (i) “Referrer” means a person who does all of the
14following:
15(A) Contracts or otherwise agrees with a retailer to list
16or advertise for sale a product of the retailer on a platform,
17provided such listing or advertisement identifies whether or
18not the retailer collects sales and use tax.
19(B) Receives a commission, fee, or other consideration from
20the retailer for the listing or advertisement.
21(C) Provides referrals to a retailer or an affiliate of the
22retailer.
23(D) Does not collect money or other consideration from the
24customer for the transaction.
25(ii) “Referrer” does not include a person primarily engaged
26in the business of printing or publishing a newspaper.
27f. (1) A retailer that makes Iowa sales through the use of
28a solicitor. For purposes of this paragraph, “solicitor” means
29a person that directly or indirectly solicits business for a
30retailer.
31(2) (a) A retailer is deemed to have a solicitor in
32this state if the retailer enters into an agreement with a
33resident under which the resident, for a commission, fee, or
34other similar consideration, directly or indirectly refers
35potential customers, whether by link on an internet site,
-80-1or otherwise, to the retailer. This determination may be
2rebutted by a showing of proof that the resident with whom the
3retailer has an agreement did not engage in any solicitation
4in this state on behalf of the retailer that would satisfy the
5nexus requirement of the United States Constitution during the
6calendar year in question.
7(b) This subparagraph (2) shall not apply to a retailer that
8has Iowa gross revenue from Iowa sales of ten thousand dollars
9or less for the immediately preceding calendar year or the
10current calendar year.
11(c) For purposes of this subparagraph (2):
12(i) “Iowa gross revenue” means gross revenue from Iowa
13sales to purchasers who were referred to the retailer by all
14solicitors who are residents.
15(ii) “Resident” includes an individual who is a resident
16of this state, as defined in section 422.4, and any business
17that owns any tangible or intangible property with a situs in
18this state, or that has one or more employees performing or
19providing services for the business in this state.
20(d) This paragraph “f” does not apply to chapter 422 and
21does not expand or contract the state’s jurisdiction to tax a
22trade or business under chapter 422.
23g. A retailer that owns, controls, rents, licenses, makes
24available, or uses any tangible or intangible property in this
25state or with a situs in this state, to make or otherwise
26facilitate a retail sale.
27h. (1) Any person that enters into a contract or agreement
28with a governmental entity, including but not limited to
29contracts for the provision of financial assistance or
30incentives such as a tax credit, forgivable loan, grant, tax
31rebate, or any other thing of value. For purposes of this
32subparagraph, “governmental entity” means any unit of government
33in the executive, legislative, or judicial branch, or any
34political subdivision of the state, including but not limited
35to a city, county, township, or school district.
-81- 1(2) Every bid submitted and each contract or agreement
2executed by a state agency shall contain a certification by
3the bidder or contractor stating that the bidder or contractor
4is registered with the department pursuant to this chapter
5and will collect and remit Iowa sales and use tax due under
6this chapter. In the certification, the bidder or contractor
7shall also acknowledge that the state agency may declare the
8contractor or bid void if the certification is false or becomes
9false. Fraudulent certification, by act or omission, may
10result in the state agency or its representative filing for
11damages for breach of contract.
12i. Any affiliate of any retailer that is required to collect
13and remit sales and use tax under this chapter, provided the
14affiliate makes retail sales.
15 Sec. 163. Section 423.15, unnumbered paragraph 1, Code
162018, is amended to read as follows:
17All sales of products tangible personal property or
18services, except those sales enumerated in section 423.16,
19shall be sourced according to this section by sellers
20obligated to collect Iowa sales and use tax. The sourcing
21rules described in this section apply to sales of tangible
22personal property, digital goods, and all services other than
23telecommunications services. This section only applies to
24determine a seller’s obligation to pay or collect and remit
25a Iowa sales or use tax with respect to the seller’s sale of
26a product. This section does not affect the obligation of a
27purchaser or lessee to remit tax on the use of the product to
28the taxing jurisdictions in which the use occurs. A seller’s
29obligation to collect Iowa sales tax or Iowa use tax only
30occurs if the sale is sourced to this state. Whether Iowa
31sales tax applies to a sale sourced to Iowa shall be determined
32based on the location at which the sale is consummated by
33delivery or, in the case of a service, where the first use of
34the service occurs made by a seller subject to section 423.1,
35subsection 48, or section 423.14A.
-82-1 Sec. 164. Section 423.15, subsection 1, paragraph e, Code
22018, is amended to read as follows:
3e. When paragraphs “a”, “b”, “c”, and “d” do not apply,
4including the circumstance where the seller is without
5sufficient information to apply the previous rules, then the
6location will be determined by the address from which tangible
7personal property was shipped, from which the digital good
8or the computer software delivered electronically was first
9available for transmission by the seller, or from which the
10service was provided disregarding for these purposes any
11location that merely provided the digital transfer of the
12product sold.
13 Sec. 165. Section 423.29, subsection 1, Code 2018, is
14amended to read as follows:
151. Every seller who is a retailer and who is making taxable
16sales of tangible personal property in Iowa shall, at the time
17of selling the property making the sale, collect the sales tax.
18Every seller who is a retailer maintaining a place of business
19in this state that is not otherwise required to collect sales
20tax under the provisions of this chapter and who is selling
21tangible personal property for use in Iowa shall, at the time
22of making the sale, whether within or without the state,
23collect the use tax. Sellers required to collect sales or use
24tax shall give to any purchaser a receipt for the tax collected
25in the manner and form prescribed by the director.
26 Sec. 166. Section 423.31, subsection 1, Code 2018, is
27amended to read as follows:
281. Each person subject to this section and section 423.36
29and in accordance with the provisions of this section and
30section 423.36 shall, on or before the last day of the month
31following the close of each calendar quarter during which
32such person is or has become or ceased being subject to the
33provisions of this section and section 423.36, make, sign, and
34file a return for the calendar quarter in the form as may be
35required. Returns shall show information relating to sales
-83-1prices including goods, wares, tangible personal property
2 and services converted to use of such person, the amounts of
3sales prices excluded and exempt from the tax, the amounts of
4sales prices subject to tax, a calculation of tax due, and
5any other information for the period covered by the return
6as may be required. Returns shall be signed by the retailer
7or the retailer’s authorized agent and must be certified by
8the retailer to be correct in accordance with forms and rules
9prescribed by the director.
10 Sec. 167. Section 423.31, subsection 5, paragraph a, Code
112018, is amended to read as follows:
12a. Upon making application and receiving approval from
13the director, a parent corporation person and its affiliated
14corporations affiliates that make retail sales of tangible
15personal property or taxable enumerated services may make
16deposits and file a consolidated sales tax return for the
17affiliated group, pursuant to rules adopted by the director. A
18parent corporation person and each affiliate corporation that
19files a consolidated return are jointly and severally liable
20for all tax, penalty, and interest found due for the tax period
21for which a consolidated return is filed or required to be
22filed.
23 Sec. 168. Section 423.33, subsection 3, Code 2018, is
24amended to read as follows:
253. Event sponsor’s liability for sales tax. A person
26sponsoring a flea market or a craft, antique, coin, or stamp
27show or similar event shall obtain from every retailer selling
28tangible personal property or taxable services at the event
29proof that the retailer possesses a valid sales tax permit or
30secure from the retailer a statement, taken in good faith,
31that tangible personalproperty or services offered for sale
32are not subject to sales tax. Failure to do so renders a
33sponsor of the event liable for payment of any sales tax,
34interest, and penalty due and owing from any retailer selling
35property or services at the event. Sections 423.31, 423.32,
-84-1423.37, 423.38, 423.39, 423.40, 423.41, and 423.42 apply to the
2sponsors. For purposes of this subsection, a “person sponsoring
3a flea market or a craft, antique, coin, or stamp show or similar
4event” does not include an organization which sponsors an
5event determined to qualify as an event involving casual sales
6pursuant to section 423.3, subsection 39, or the state fair or
7a fair as defined in section 174.1.
8 Sec. 169. Section 423.33, Code 2018, is amended by adding
9the following new subsection:
10 NEW SUBSECTION. 4. Liability of affiliates.
11a. Notwithstanding any other provision of law to the
12contrary, if any retailer required to collect and remit sales
13and use tax pursuant to sections 423.14, 423.14A, and 423.29,
14or any other provision of this chapter, fails to do so, all
15affiliates that directly, indirectly, or constructively control
16the retailer shall be jointly and severally liable for any tax,
17penalty, and interest under this chapter, regardless of whether
18the affiliate is a retailer.
19b. Pursuant to paragraph “a”, the department may elect
20to assess the full amount of any tax, penalty, and interest
21against the retailer, an affiliate of the retailer described
22in paragraph “a”, or any combination of the retailer and the
23retailer’s affiliates described in paragraph “a”.
24c. Notwithstanding any other provision of law to the
25contrary, the department has the discretion to deem an
26affiliate of a retailer an agent or alter ego of that retailer.
27d. Notwithstanding any other provision of law to the
28contrary, the department has the discretion to disregard or
29look through any organizational structure of an enterprise in
30order to assess and collect any tax, penalty, and interest
31against an affiliate that is acting to benefit an affiliate or
32an enterprise of which the affiliate is a part.
33 Sec. 170. Section 423.34, Code 2018, is amended to read as
34follows:
35423.34 Liability of user.
-85- 1Any person who uses any tangible personal property or
2services enumerated in section 423.2 upon which the use tax has
3not been paid, either to the county treasurer or to a retailer
4or direct to the department as required by this subchapter,
5shall be liable for the payment of tax, and shall on or before
6the last day of the month next succeeding each quarterly period
7pay the use tax upon all property or services used by the
8person during the preceding quarterly period in the manner and
9accompanied by such returns as the director shall prescribe.
10All of the provisions of sections 423.32 and 423.33 with
11reference to the returns and payments shall be applicable to
12the returns and payments required by this section.
13 Sec. 171. Section 423.57, Code 2018, is amended to read as
14follows:
15423.57 Statutes applicable.
16The director shall administer this subchapter as it relates
17to the taxes imposed in this chapter in the same manner and
18subject to all the provisions of, and all of the powers,
19duties, authority, and restrictions contained in sections
20423.14, 423.14A, 423.15, 423.16, 423.17, 423.19, 423.20,
21423.21, 423.22, 423.23, 423.24, 423.25, 423.29, 423.31, 423.32,
22423.33, 423.34, 423.34A, 423.35, 423.37, 423.38, 423.39,
23423.40, 423.41, and 423.42, section 423.43, subsection 1, and
24sections 423.45, 423.46, and 423.47.
25 Sec. 172. Section 423.58, Code 2018, is amended to read as
26follows:
27423.58 Collection, permit, and tax return exemption for
28certain out-of-state businesses.
29Notwithstanding sections 423.14, 423.14A, 423.29, 423.31,
30423.32, and 423.36, a person meeting the requirements of
31section 29C.24 is not required to obtain a sales or use tax
32permit, collect and remit sales and use tax, or make and file
33applicable sales or use tax returns, as provided in section
3429C.24, subsection 3, paragraph “a”, subparagraph (2).
35 Sec. 173. Section 423B.5, subsection 1, Code 2018, is
-86-1amended to read as follows:
21. A local sales and services tax at the rate of not more
3than one percent may be imposed by a county on the sales price
4taxed by the state under chapter 423, subchapter II. A local
5sales and services tax shall be imposed on the same basis as
6the state sales and services tax or in the case of the use of
7natural gas, natural gas service, electricity, or electric
8service on the same basis as the state use tax and shall not
9be imposed on the sale of any property or on any service not
10taxed by the state, except the tax shall not be imposed on
11the sales price from the sale of motor fuel or special fuel
12as defined in chapter 452A which is consumed for highway use
13or in watercraft or aircraft if the fuel tax is paid on the
14transaction and a refund has not or will not be allowed,
15on the sales price from the sale of equipment by the state
16department of transportation, or on the sales price from the
17sale or use of natural gas, natural gas service, electricity,
18or electric service in a city or county where the sales price
19from the sale of natural gas or electric energy is subject to
20a franchise fee or user fee during the period the franchise
21or user fee is imposed. A local sales and services tax is
22applicable to transactions within those incorporated and
23unincorporated areas of the county where it is imposed and,
24which transactions include but are not limited to sales sourced
25pursuant to sections 423.15, 423.17, 423.19, or 423.20, to a
26location within that incorporated or unincorporated area of the
27county. The tax shall be collected by all persons required
28to collect state sales taxes. All cities contiguous to each
29other shall be treated as part of one incorporated area and the
30tax would be imposed in each of those contiguous cities only
31if the majority of those voting in the total area covered by
32the contiguous cities favors its imposition. In the case of a
33local sales and services tax submitted to the registered voters
34of two or more contiguous counties as provided in section
35423B.1, subsection 4, paragraph “c”, all cities contiguous to
-87-1each other shall be treated as part of one incorporated area,
2even if the corporate boundaries of one or more of the cities
3include areas of more than one county, and the tax shall be
4imposed in each of those contiguous cities only if a majority
5of those voting on the tax in the total area covered by the
6contiguous cities favored its imposition.
7 Sec. 174. Section 423B.6, subsection 2, paragraph b, Code
82018, is amended to read as follows:
9b. The ordinance of a county board of supervisors imposing
10a local sales and services tax shall adopt by reference the
11applicable provisions of the appropriate sections of chapter
12423. All powers and requirements of the director to administer
13the state sales tax law and use tax law are applicable to the
14administration of a local sales and services tax law and the
15local excise tax, including but not limited to the provisions
16of section 422.25, subsection 4, sections 422.30, 422.67,
17and 422.68, section 422.69, subsection 1, sections 422.70
18through 422.75, section 423.14, subsection 1 and subsection
192, paragraphs “b” through “e”, and sections 423.14A, 423.15,
20423.23, 423.24, 423.25, 423.31 through 423.35, 423.37 through
21423.42, 423.46, and 423.47. Local officials shall confer
22with the director of revenue for assistance in drafting the
23ordinance imposing a local sales and services tax. A certified
24copy of the ordinance shall be filed with the director as soon
25as possible after passage.
26 Sec. 175. LEGISLATIVE INTENT. It is the intent of the
27general assembly that the provisions of this division of this
28Act amending the definition of “place of business” in section
29423.1, subsection 37, and “sales” in section 423.1, subsection
3050, enacting definitions of “sold at retail in the state” in
31section 423.1, subsection 55A, and “subscription” in section
32423.1, subsection 57A, are conforming amendments consistent
33with current state law, and that the amendments do not change
34the application of current law but instead reflect current law
35both before and after the enactment of this division of this
-88-1Act.
2 Sec. 176. EFFECTIVE DATE.
31. Except as provided in subsection 2, this division of this
4Act takes effect January 1, 2019.
52. The following take effect July 1, 2018:
6a. The sections of this division of this Act amending
7section 423.1, subsections 37 and 50.
8b. The sections of this division of this Act enacting
9section 423.1, subsections 55A and 57A.
10c. The section of this division of this Act amending section
11423.2, subsection 1, paragraph “a”, subparagraph (1).
12d. The provisions adding photography and retouching to the
13list of enumerated services subject to the sales tax in the
14section of this division of this Act amending section 423.2,
15subsection 6.
16e. The section of this division of this Act enacting section
17423.2, subsection 8, paragraph “d”.
18f. The section of this division of this Act amending section
19423.5, subsection 1, paragraph “a”.
20g. The section of this division of this Act entitled
21“legislative intent” which describes the intent of the general
22assembly with respect to certain amendments in this division of
23this Act to the definition of “place of business” in section
24423.1, subsection 37, “sales” in section 423.1, subsection 50,
25the enactment of a definition for “subscription” in section
26423.1, subsection 57A, and “sold at retail” in section 423.1,
27subsection 55A.
28DIVISION VII
29HOTEL AND MOTEL EXCISE TAX AND AUTOMOBILE RENTAL EXCISE TAX
30CHANGES
31 Sec. 177. Section 423A.2, subsection 1, Code 2018, is
32amended to read as follows:
331. For the purposes of this chapter, unless the context
34otherwise requires:
35a. “Department” means the department of revenue.
-89- 1b. “Lessor” means any of the following:
2(1) Aperson engaged in the business of renting lodging to
3users.
4(2) A person who acquires a right to or interest in any
5lodging with an intent to rent the lodging to another person.
6(3) A person who actually or constructively rents lodging,
7regardless of who owns or controls the lodging.
8(4) A lodging facilitator.
9(5) A retailer or retailer maintaining a place of business
10in this state as defined in section 423.1, including those
11persons who meet the requirements of section 423.14A, which
12retailer or retailer maintaining a place of business in this
13state would be responsible for collection and payment of the
14hotel and motel tax if it were a sales or use tax under chapter
15423.
16c. “Lodging” means rooms, apartments, or sleeping quarters
17in a hotel, motel, inn, public lodging house, rooming house,
18cabin, apartment, residential property, or manufactured or
19mobile home which is tangible personal property, or in a
20tourist court, or in any place where sleeping accommodations
21are furnished to transient guests for rent, whether with or
22without meals. Lodging does not include rooms that are not
23used for sleeping accommodations.
24d. “Lodging facilitator” means any person who facilitates
25the renting of lodging to users by satisfying subparagraphs (1)
26and (2) as follows:
27(1) The person directly or indirectly does any of the
28following:
29(a) Lists, makes available, or advertises lodging for rent
30by a lessor in any forum.
31(b) Transmits or otherwise communicates an offer or
32acceptance between a lessor or user.
33(c) Owns, rents, licenses, makes available, or operates any
34electronic or physical infrastructure or any property, process,
35method, copyright, trademark, or patent that connects lessors
-90-1and users to each other.
2(d) Provides a platform or other marketplace for renting
3lodging or otherwise facilitates the renting of lodging,
4regardless of ownership or control of the lodging.
5(e) Provides software development or research and
6development activities related to any activity described in
7this subparagraph (1), if such software development or research
8and development activities are directly related to the physical
9or electronic marketplace provided by a lodging facilitator.
10(f) Provides or offers fulfillment or storage services for a
11lessor.
12(g) Sets prices for a lessor’s rental of lodging.
13(h) Provides or offers customer service to a lessor or
14a lessor’s customers, or accepts or assists with returns,
15exchanges, cancellations, or rescheduling of the rental of
16lodging by a lessor.
17(2) The person directly or indirectly does any of the
18following:
19(a) Collects the sales price for the renting of the lodging.
20(b) Provides payment processing services for the renting of
21lodging.
22(c) Charges, collects, or otherwise receives booking fees,
23advertising revenues, or other consideration from the renting
24of lodging or the facilitation of the renting of lodging,
25regardless of ownership or control of the lodging.
26(d) Through terms and conditions, agreements, or
27arrangements with a third party, collects payment in connection
28with a rental of lodging from a user and transmits that payment
29to the lessor, regardless of whether the person collecting
30and transmitting such payment receives compensation or other
31consideration in exchange for the service.
32(e) Provides a virtual currency that users are allowed or
33required to use to rent lodging.
34d. e. “Person” means the same as the term is defined in
35section 423.1.
-91- 1e. f. “Renting”, “rental”, or “rent” means a transfer of
2possession or control of lodging for a fixed or indeterminate
3term for consideration and includes any kind of direct or
4indirect charge for such lodging or its use.
5f. g. “Sales price” means the consideration for renting of
6lodging and means the same as the term is defined in section
7423.1 all direct or indirect consideration, including but
8not limited to cash, credit, property, and services, paid in
9connection with any charge of any description associated with
10the renting of lodging or with communicating, negotiating,
11reserving, booking, facilitating, or otherwise arranging to
12rent lodging, including but not limited to booking fees,
13reservation fees, service fees, cleaning fees, linen fees,
14towel fees, and nonrefundable deposits. When determining “sales
15price”, no deduction shall be taken for any of the following:
16(1) The lessor’s cost of the property rented.
17(2) The cost of materials used, labor or service cost,
18interest, losses, all costs of transportation to the lessor,
19all taxes imposed on the lessor, or any other expenses of the
20lessor.
21(3) Charges by the lessor for any services necessary to
22complete the rental transaction.
23g. h. “User” means a person to whom lodging is rented.
24 Sec. 178. NEW SECTION. 423A.3A Collection and remittance by
25lodging facilitators — joint and several liability.
26If a transaction for the rental of lodging involves both a
27lodging facilitator and another lessor, all of the following
28shall apply:
291. The lodging facilitator shall collect the state-imposed
30tax under section 423A.3 and the locally imposed tax under
31section 423A.4 on the entire sales price paid by the user,
32regardless of the amount of the sales price that will
33ultimately accrue to or benefit the lodging facilitator,
34another lessor, or any other person.
352. The lodging facilitator and any other lessor involved
-92-1in the transaction shall be jointly and severally liable for
2collecting and remitting the tax under sections 423A.3 and
3423A.4.
4 Sec. 179. Section 423A.5, Code 2018, is amended to read as
5follows:
6423A.5 Exemptions.
71. There are exempted from the provisions of this chapter
8and from the computation of any amount of tax imposed by
9section 423A.3 this chapter all of the following:
10a. 1. The sales price from the renting of lodging which is
11rented by the same person for a period of more than thirty-one
12consecutive days.
13b. 2. The sales price from the renting of sleeping rooms
14in dormitories and in memorial unions at all universities and
15colleges located in the state of Iowa.
162. There is exempted from the provisions of this chapter and
17from the computation of any amount of tax imposed by section
18423A.4 all of the following:
19a. The sales price from the renting of lodging or rooms
20exempt under subsection 1.
21b. 3. The sales price of lodging furnished to the guests of
22a religious institution if the property is exempt under section
23427.1, subsection 8, and the purpose of renting is to provide a
24place for a religious retreat or function and not a place for
25transient guests generally.
26 Sec. 180. Section 423A.6, subsection 4, Code 2018, is
27amended to read as follows:
284. Section 422.25, subsection 4, sections 422.30, 422.67,
29and 422.68, section 422.69, subsection 1, sections 422.70,
30422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
311, and sections 423.23, 423.24, 423.25, 423.31, 423.33,
32423.35, 423.37 through 423.42, and 423.47, consistent with the
33provisions of this chapter, apply with respect to the taxes
34authorized under this chapter, in the same manner and with the
35same effect as if the state and local hotel and motel taxes
-93-1were retail sales taxes within the meaning of those statutes.
2Notwithstanding this subsection, the director shall provide for
3quarterly filing of returns and for other than quarterly filing
4of returns both as prescribed in section 423.31. The director
5may require all persons who are engaged in the business of
6deriving any sales price subject to tax under this chapter to
7register with the department. All taxes collected under this
8chapter by a retailer, lessor, or any individual other person
9 are deemed to be held in trust for the state of Iowa and the
10local jurisdictions imposing the taxes.
11 Sec. 181. Section 423C.2, subsection 3, Code 2018, is
12amended to read as follows:
133. “Lessor” means a any of the following:
14a. Aperson engaged in the business of renting automobiles
15to users. “Lessor” includes a
16b. Amotor vehicle dealer licensed pursuant to chapter
17322 who rents automobiles to users. For this purpose, the
18objective of making a profit is not necessary to make the
19renting activity a business.
20c. A person who acquires a right to or interest in any
21automobile with an intent to rent the automobile to another
22person.
23d. A person who actually or constructively rents
24automobiles, regardless of who owns or controls the
25automobiles.
26e. A rental facilitator.
27f. A retailer or retailer maintaining a place of business in
28this state as defined in section 423.1, including those persons
29who meet the requirements of section 423.14A, which retailer or
30retailer maintaining a place of business in this state would be
31responsible for collection and payment of the automobile rental
32excise tax if it were a sales or use tax under chapter 423.
33 Sec. 182. Section 423C.2, Code 2018, is amended by adding
34the following new subsection:
35 NEW SUBSECTION. 06. “Rental facilitator” means any person
-94-1who facilitates the renting of an automobile to users by
2satisfying paragraphs “a” and “b” as follows:
3a. The person directly or indirectly does any of the
4following:
5(1) Lists, makes available, or advertises automobiles for
6rent by a lessor in any forum.
7(2) Transmits or otherwise communicates an offer or
8acceptance between a lessor or user.
9(3) Owns, rents, licenses, makes available, or operates any
10electronic or physical infrastructure or any property, process,
11method, copyright, trademark, or patent that connects lessors
12and users to each other.
13(4) Provides a platform or other marketplace for
14renting automobiles or otherwise facilitates the renting
15of automobiles, regardless of ownership or control of the
16automobile.
17(5) Provides software development or research and
18development activities related to any activity described in
19this paragraph “a”, if such software development or research and
20development activities are directly related to the physical or
21electronic marketplace provided by a rental facilitator.
22(6) Provides or offers fulfillment or storage services for a
23lessor.
24(7) Sets prices for a lessor’s rental of automobiles.
25(8) Provides or offers customer service to a lessor or
26a lessor’s customers, or accepts or assists with returns,
27exchanges, cancellations, or rescheduling of the rental of
28automobiles by a lessor.
29b. The person directly or indirectly does any of the
30following:
31(1) Collects the rental price for the renting of an
32automobile.
33(2) Provides payment processing services for the renting of
34an automobile.
35(3) Charges, collects, or otherwise receives booking
-95-1fees, advertising revenues, or other consideration from the
2renting of an automobile or the facilitation of the renting
3of an automobile, regardless of ownership or control of the
4automobile.
5(4) Through terms and conditions, agreements, or
6arrangements with a third party, collects payment in connection
7with a rental of automobiles from a user and transmits that
8payment to the lessor, regardless of whether the person
9collecting and transmitting such payment receives compensation
10or other consideration in exchange for the service.
11(5) Provides a virtual currency that users are allowed or
12required to use to rent automobiles.
13 Sec. 183. Section 423C.2, subsection 6, Code 2018, is
14amended by striking the subsection and inserting in lieu
15thereof the following:
166. “Rental price” means all direct or indirect
17consideration, including but not limited to cash, credit,
18property, and services, paid in connection with any charge of
19any description associated with the renting of an automobile
20or with communicating, negotiating, reserving, booking,
21facilitating, or otherwise arranging to rent an automobile,
22including but not limited to booking fees, reservation fees,
23service fees, and nonrefundable deposits. When determining
24“rental price”, no deduction shall be taken for any of the
25following:
26a. The lessor’s cost of the property rented.
27b. The cost of materials used, labor or service cost,
28interest, losses, all costs of transportation to the lessor,
29all taxes imposed on the lessor, or any other expenses of the
30lessor.
31c. Charges by the lessor for any services necessary to
32complete the rental transaction.
33 Sec. 184. NEW SECTION. 423C.3A Collection and remittance by
34rental facilitators — joint and several liability.
35If a transaction for the rental of an automobile involves
-96-1both a rental facilitator and another lessor, all of the
2following shall apply:
31. The rental facilitator shall collect the tax under
4section 423C.3 on the entire rental price paid by the user,
5regardless of the amount of the rental price that will
6ultimately accrue to or benefit the rental facilitator, another
7lessor, or any other person.
82. The rental facilitator and any other lessor involved
9in the transaction shall be jointly and severally liable for
10collecting and remitting the tax under section 423C.3.
11 Sec. 185. LEGISLATIVE INTENT. It is the intent of the
12general assembly that the provision of this division of this
13Act amending the definition of “lodging” in section 423A.2,
14subsection 1, paragraph “c”, is a conforming amendment
15consistent with current state law, and that the amendment
16does not change the application of current law but instead
17reflects current law both before and after the enactment of
18this division of this Act.
19 Sec. 186. EFFECTIVE DATE.
201. Except as provided in subsection 2, this division of this
21Act takes effect January 1, 2019.
222. The following take effect July 1, 2018:
23a. The provision amending the definition of “lodging” in the
24section of this division of this Act amending section 423A.2,
25subsection 1, paragraph “c”.
26b. The section of this division of this Act entitled
27“legislative intent” which describes the intent of the general
28assembly with respect to the amendment in this division of
29this Act to the definition of “lodging” in section 423A.2,
30subsection 1, paragraph “c”.
31<DIVISION VIII
32MISCELLANEOUS TAX PROVISIONS
33 Sec. 187. NEW SECTION. 421.71 Class actions — implied
34right of action — private cause of action immunity.
351. Class actions prohibited. No class action may be brought
-97-1against the department, a taxpayer, or a person required to
2collect any tax imposed under this title, in any court, agency,
3or other adjudicative body, or in any other forum, based on
4any act or omission arising from or related to any provision
5of this title.
62. No implied right of action. Nothing in this Title shall
7be construed as creating or providing an implied private right
8of action or any private common law claim against any taxpayer,
9or against any person required to collect any tax imposed under
10this Title, in any court, agency, or other adjudicative body,
11or in any other forum. This subsection shall not apply to or
12otherwise limit any claim, action, mandate, power, remedy, or
13discretion of the department, or an agent or designee of the
14department.
153. Private cause of action immunity for overpayment of
16certain taxes.
17a. A taxpayer, or any person required to collect taxes
18imposed under chapters 423, 423A, 423B, 423C, and 423D, and
19chapter 423G, as enacted in 2018 Iowa Acts, Senate File 512,
20shall be immune from any private cause of action arising from
21or related to the overpayment of taxes imposed under chapters
22423, 423A, 423B, 423C, and 423D, and chapter 423G, as enacted
23in 2018 Iowa Acts, Senate File 512, that are collected and
24remitted to the department.
25b. Nothing in this subsection shall apply to or otherwise
26limit any of the following:
27(1) Any claim, action, mandate, power, remedy, or
28discretion of the department, or an agent or designee of the
29department.
30(2) A taxpayer’s right to seek a refund from the department
31related to taxes imposed under chapters 423, 423A, 423B,
32423C, and 423D, and chapter 423G, as enacted in 2018 Iowa
33Acts, Senate File 512, that are collected from or paid by the
34taxpayer.
35 Sec. 188. EFFECTIVE DATE. This division of this Act, being
-98-1deemed of immediate importance, takes effect upon enactment.>
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