Bill Text: IA HSB724 | 2021-2022 | 89th General Assembly | Introduced

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Bill Title: A bill for an act relating to state and local finances and the duties and procedures of the department of revenue by providing for electronic filing, communications, and records, modifying transfer tax remittances, the assessment of property, the collection of debt, and the taxation of pass-through entities, reducing inheritance taxes for unknown heirs, establishing salaries, providing for a fee, making appropriations, and providing penalties, and including effective date, applicability, and retroactive applicability provisions.(See HF 2552.)

Spectrum: Committee Bill

Status: (Introduced - Dead) 2022-03-09 - Committee report approving bill, renumbered as HF 2552. [HSB724 Detail]

Download: Iowa-2021-HSB724-Introduced.html

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House Study Bill 724 - Introduced
SENATE/HOUSE FILE _____
BY (PROPOSED DEPARTMENT OF
REVENUE BILL)
A BILL FOR
An Act relating to state and local finances and the duties and
procedures of the department of revenue by providing for
electronic filing, communications, and records, modifying
transfer tax remittances, the assessment of property,
the collection of debt, and the taxation of pass-through
entities, reducing inheritance taxes for unknown heirs,
establishing salaries, providing for a fee, making
appropriations, and providing penalties, and including
effective date, applicability, and retroactive applicability
provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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DIVISION I
RECORD RETENTION
Section 1. Section 422.68, subsections 3 and 4, Code 2022,
are amended to read as follows:
3. a. The director may shall destroy useless records and
returns, reports, and communications records of any taxpayer
filed with or kept by the department after those returns,
records, reports, or communications have been in the custody
of the department for a period of not less than three years or
such time as the director prescribes by rule. However, after
the accounts of a person have been examined by the director and
the amount of tax and penalty due have been finally determined,
the director may order the destruction of any records
previously filed by that taxpayer, notwithstanding the fact
that those records have been in the custody of the department
for a period less than three years. These records and
documents shall be destroyed in the manner prescribed by the
director by the end of the calendar year following the year in
which the record is determined by the department to be useless .
b. (1) A taxpayer or the department may request that a
specific record be retained beyond the useful life of the
record.
(2) The director shall have the discretion to approve or
deny a request made pursuant to subparagraph (1).
c. Notwithstanding paragraph “a” , the department may retain
any of the following:
(1) A record that no longer contains personally
identifiable information of a specific taxpayer.
(2) A record described in section 17A.3, subsection 1,
paragraph “d” or “e” .
d. The department shall adopt rules pursuant to chapter 17A
to administer this subsection.
4. The department may make photostat, microfilm,
electronic, or other electronic or photographic copies of
records , reports, and other papers either filed by the taxpayer
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or prepared by the department , or make such copies by other
methods . In addition, the department may create and or use
any system of recordkeeping reasonably calculated to preserve
its records for any time period required by law. When these
photostat, electronic, microfilm, or other copies have been a
copy is made, the department may destroy the original records
record which are the served as the basis for the copies copy
in any manner prescribed by the director. These photostat,
electronic, microfilm, or other types of copies, when no longer
of use, may be destroyed A copy shall be subject to destruction
as provided in subsection 3 . These photostat, microfilm,
electronic, or other records A copy shall be admissible in
evidence when duly certified and authenticated by the officer
having custody and control of them the record .
Sec. 2. EFFECTIVE DATE. This division of this Act takes
effect January 1, 2025.
DIVISION II
ELECTRONIC FILING —— FIDUCIARIES —— BUSINESS ENTITIES
Sec. 3. Section 422.14, subsection 1, Code 2022, is amended
to read as follows:
1. a. A fiduciary subject to taxation under this
subchapter , as provided in section 422.6 , shall make a return,
signed in accordance with forms and rules prescribed by the
director, for the individual, estate, or trust for whom or for
which the fiduciary acts, if the taxable income thereof amounts
to six hundred dollars or more. A nonresident fiduciary shall
file a copy of the federal income tax return for the current
tax year with the return required by this section .
b. (1) A fiduciary required to file a return under
paragraph “a” , shall file the return in an electronic format as
specified by the department in a tax year in which any of the
following circumstances apply:
(a) The individual, estate, or trust for whom or which the
fiduciary acts has two hundred fifty thousand dollars or more
in gross receipts, as defined by rule by the department.
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(b) The fiduciary is required to provide ten or more
schedules K-1 to the beneficiaries.
(c) The fiduciary reports twenty-five thousand dollars or
more of Iowa tax credits on the return.
(2) This paragraph “b” applies to any form or schedule
supporting a return required to be electronically filed or
any amended return if the amended return meets any of the
circumstances requiring electronic filing in this paragraph.
c. (1) Notwithstanding paragraph “b” , the department may
provide an exception to the electronic filing requirement.
(2) A return subject to the electronic filing requirement in
paragraph “b” that is filed in a manner other than an electronic
format specified by the department shall not be considered
a valid return unless the department provides an exception
pursuant to this paragraph.
d. The department shall adopt rules to implement this
subsection.
Sec. 4. Section 422.15, subsection 2, Code 2022, is amended
to read as follows:
2. a. Every partnership, including limited partnerships,
doing business in this state, or deriving income from sources
within this state as defined in section 422.32, subsection 1 ,
paragraph “g” , shall make a return, stating specifically the
net income and capital gains or losses reported on the federal
partnership return, the names and addresses of the partners,
and their respective shares in said amounts.
b. (1) A partnership required to file a return under
paragraph “a” , shall file the return in an electronic format
specified by the department in a tax year in which any of the
following circumstances apply:
(a) The partnership has two hundred fifty thousand dollars
or more in total gross receipts, as defined by rule by the
department.
(b) The partnership is required to provide ten or more Iowa
schedules K-1 to the partners.
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(c) The partnership reports twenty-five thousand dollars or
more of Iowa tax credits on the return.
(2) This paragraph “b” applies to any form or schedule
supporting a return required to be electronically filed or
any amended return if the amended return meets any of the
circumstances requiring electronic filing in this paragraph.
c. (1) Notwithstanding paragraph “b” , the department may
provide an exception to the electronic filing requirement.
(2) A return subject to the electronic filing requirement in
paragraph “b” that is filed in a manner other than an electronic
format specified by the department shall not be considered
a valid return unless the department provides an exception
pursuant to this paragraph.
d. The department shall adopt rules to implement this
subsection.
Sec. 5. Section 422.16B, subsection 8, Code 2022, is amended
to read as follows:
8. a. For the efficient administration of this chapter , the
director may require or provide for the composite return on the
same form as or combined with a pass-through entity’s annual
return required under section 422.14 , 422.15 , or 422.36 , but in
such case the composite return shall be considered a separate
return for purposes of this chapter and section 421.27 .
b. (1) If a pass-through entity is required to file its
annual return under section 422.14, 422.15, or 422.36 in an
electronic format, the pass-through entity shall file its
composite return for the same taxable year in an electronic
format specified by the department.
(2) This paragraph applies to any form or schedule
supporting a return required to be electronically filed or
any amended return if the amended return meets any of the
circumstances requiring electronic filing in this paragraph.
c. A return subject to the electronic filing requirement in
paragraph “b” that is filed in a manner other than an electronic
format specified by the department shall not be considered a
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valid return.
d. The department shall adopt rules to implement this
subsection.
Sec. 6. Section 422.36, Code 2022, is amended by adding the
following new subsection:
NEW SUBSECTION . 8. a. A corporation shall file a return
required under this section in an electronic format specified
by the department for any tax year if any of the following
circumstances apply:
(1) The corporation has gross receipts of two hundred fifty
thousand dollars or more, as defined by rule by the department.
(2) The corporation reports twenty-five thousand dollars or
more of Iowa tax credits on the return.
b. A corporation described in subsection 5 shall file all
returns required under this section in an electronic format
specified by the department for any tax year if any of the
following circumstances apply:
(1) The corporation has gross receipts of two hundred fifty
thousand dollars or more, as defined by rule by the department.
(2) The corporation is required to provide ten or more Iowa
schedules K-1 to shareholders.
(3) The corporation reports twenty-five thousand dollars or
more of Iowa tax credits on the return.
c. This subsection applies to any form or schedule
supporting a return required to be electronically filed or
any amended return if the amended return meets any of the
circumstances requiring electronic filing in this subsection.
d. (1) Notwithstanding paragraphs “a” and “b” , the
department may provide an exception to the requirement to file
a return in an electronic format.
(2) A return subject to the electronic filing requirement
in this subsection that is filed in a manner other than in an
electronic format specified by the department shall not be
considered a valid return unless the department provides an
exception pursuant to this paragraph.
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e. The department shall adopt rules to implement this
subsection.
Sec. 7. Section 422.37, Code 2022, is amended by adding the
following new subsection:
NEW SUBSECTION . 8. a. (1) The affiliated group shall
file a return under this section for each taxable year in an
electronic format specified by the department, regardless of
the total gross receipts of or amount of credits reported by
the affiliated group.
(2) For purposes of the electronic filing requirement, a
return of an affiliated group includes any form or schedule
supporting the return or any amended return of the affiliated
group.
(3) The financial institution is a corporation subject
to the electronic filing requirement under section 422.36,
subsection 8, paragraph “b” .
b. (1) Notwithstanding paragraph “a” , the department may
provide an exception to file a return in an electronic format.
(2) A return subject to the electronic filing requirement
in paragraph “a” that is filed in a manner other than in an
electronic format specified by the department shall not be
considered a valid return unless the department provides an
exception pursuant to this paragraph.
c. The department shall adopt rules to implement this
subsection.
Sec. 8. Section 422.62, Code 2022, is amended to read as
follows:
422.62 Due and delinquent dates.
1. The franchise tax is due and payable on the first
day following the end of the taxable year of each financial
institution, and is delinquent after the last day of the fourth
month following the due date or forty-five days after the due
date of the federal tax return, excluding extensions of time
to file, whichever is the later. Every financial institution
shall file a return as prescribed by the director on or before
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the delinquency date.
2. a. (1) A financial institution shall file a return
required under this section in an electronic format specified
by the department for any tax year if any of the following
circumstances apply:
(a) The financial institution has two hundred fifty
thousand dollars or more in gross receipts, as defined by rule
by the department.
(b) The financial institution reports twenty-five thousand
dollars or more of Iowa tax credits on the return.
(c) The financial institution is a corporation subject
to the electronic filing requirement under section 422.36,
subsection 8, paragraph “b” .
(2) This paragraph “a” applies to any form or schedule
supporting a return required to be electronically filed or
any amended return if the amended return meets any of the
circumstances requiring electronic filing in this paragraph.
b. (1) Notwithstanding paragraph “a” , the department may
provide an exception to the requirement to file a return in an
electronic format.
(2) A return subject to the electronic filing requirement
in paragraph “a” that is filed in a manner other than in an
electronic format specified by the department shall not be
considered a valid return unless the department provides an
exception pursuant to this paragraph.
c. The department shall adopt rules to implement this
subsection.
Sec. 9. APPLICABILITY.
1. Except as provided in subsection 2, this division of this
Act applies to tax years ending on or after December 31, 2022,
or for tax years ending on or after December 31 of the calendar
year in which the department implements a system for receiving
the electronic returns required by this division of this Act,
whichever is later.
2. The section of this division of this Act amending section
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422.14, subsection 1, applies to tax years ending on or after
December 31, 2023, or for tax years ending on or after December
31 of the calendar year in which the department implements a
system for receiving the electronic fiduciary returns required
by this division of this Act, whichever is later.
3. The department of revenue shall notify the Code editor by
December 1 of the calendar year the department has implemented
a system for receiving the electronic returns or electronic
fiduciary returns required by this division of this Act.
DIVISION III
ELECTRONIC FILING —— CREDIT UNIONS
Sec. 10. Section 533.329, subsection 3, Code 2022, is
amended to read as follows:
3. a. Returns shall be in the form the director of
revenue prescribes, and shall be filed with the department of
revenue on or before the last day of the fourth month after
the expiration of the tax year. The moneys and credits tax is
due and payable on the last day of the fourth month after the
expiration of the tax year.
b. A credit union shall file a return required under this
section in an electronic format specified by the department for
each tax year.
c. (1) Notwithstanding paragraph “b” , the department may
provide an exception to file a return in an electronic format.
(2) A return subject to the electronic filing requirement
in paragraph “b” that is filed in a manner other than in an
electronic format specified by the department shall not be
considered a valid return unless the department provides an
exception pursuant to this paragraph.
d. The department shall adopt rules to implement this
subsection.
Sec. 11. APPLICABILITY.
1. This division of this Act applies to tax years ending
on or after December 31, 2024, or for tax years ending on or
after December 31 of the calendar year in which the department
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implements a system for receiving the electronic returns
required by this division of this Act, whichever is later.
2. The department of revenue shall notify the Code editor by
December 1 of the calendar year the department has implemented
a system for receiving electronic returns required by this
division of this Act.
DIVISION IV
AUTHORITY TO CHARGE FEES
Sec. 12. Section 421.17, Code 2022, is amended by adding the
following new subsection:
NEW SUBSECTION . 37. To establish a fee, by rule, and charge
a person for a copy of a return. The fee shall be retained by
the department of revenue.
Sec. 13. LEGISLATIVE INTENT. This division of this Act
shall not be construed to prohibit the department of revenue
from charging a fee for a copy of a return prior to the
enactment of this division of this Act pursuant to another
authority of the department.
It is the intent of the general assembly that this division
of this Act is a conforming amendment consistent with current
state law, and the amendment does not change the application of
the current law but instead reflects current law both before
and after enactment of this division of this Act.
DIVISION V
AUTHORITY TO ACT ON BEHALF OF TAXPAYER
Sec. 14. Section 421.59, subsection 2, unnumbered paragraph
1, Code 2022, is amended to read as follows:
Unless otherwise prohibited by law, the department may
authorize the following persons to act and receive information
on behalf of and exercise all of the rights of a taxpayer,
regardless of whether a power of attorney has been filed
pursuant to subsection 1 :
Sec. 15. Section 421.59, subsection 2, paragraph d, Code
2022, is amended by striking the paragraph and inserting in
lieu thereof the following:
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d. An individual holding the following title or position
within a corporation, association, partnership, or other
business entity:
(1) An officer or employee of the corporation or association
who is authorized to act on behalf of the corporation or
association in tax matters.
(2) A designated partner or employee of the partnership
who is authorized to act on behalf of the partnership in tax
matters.
(3) A person authorized to act on behalf of the limited
liability company in tax matters pursuant to a valid statement
of authority or employee of the company who is authorized to
act on behalf of the company in tax matters.
Sec. 16. Section 421.59, subsection 2, Code 2022, is amended
by adding the following new paragraphs:
NEW PARAGRAPH . i. A trustee.
(1) Upon request, the trustee shall submit to the department
a certification of the trust, copy of the trust documents, or
court order appointing the trustee.
(2) The department has standing to petition the court that
appointed the trustee to verify the appointment or to determine
the scope of the appointment.
NEW PARAGRAPH . j. A person named as general or durable
power of attorney on a document which is currently in force
and such document has not been prescribed by the department of
revenue.
Sec. 17. Section 421.59, Code 2022, is amended by adding the
following new subsections:
NEW SUBSECTION . 3A. An individual acting on behalf of
a taxpayer pursuant to subsection 2 must certify that the
individual possesses actual authority to act on behalf of the
taxpayer in tax matters.
NEW SUBSECTION . 3B. In addition to documents required under
subsection 2, the department shall require any documents or
other evidence to demonstrate an individual has authority to
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act on behalf of the taxpayer before the department.
DIVISION VI
ELECTRONIC COMMUNICATION
Sec. 18. Section 421.60, subsection 11, Code 2022, is
amended by striking the subsection and inserting in lieu
thereof the following:
11. Electronic communication.
a. As used in this subsection, “electronic communication”
means a notice, correspondence, or other communication provided
electronically.
b. The department of revenue, by rule, may permit a person
to elect to receive an electronic communication from the
department.
c. (1) Notwithstanding any provision of law to the
contrary, when an electronic communication is posted to the
department’s electronic portal for a person who has made such
an election, the posting of the electronic communication shall
satisfy any requirement of mailing or personal service in this
title, chapter 272D, or sections 321.105A and 533.329.
(2) The department may send any notice, correspondence,
or other communication by mail to a person who has elected to
receive an electronic communication from the department.
(3) If the department sends a notice, correspondence,
or other communication by both mail and by electronic
communication, service occurs upon the earlier of when the
communication is posted to the department’s electronic portal
or mailed.
d. The director of revenue may adopt rules and establish
procedures under this subsection.
DIVISION VII
INCOME STATEMENTS TO BE PROVIDED TO THE DEPARTMENT
Sec. 19. Section 422.16, subsection 2, paragraphs b and c,
Code 2022, are amended to read as follows:
b. Every withholding agent on or before the end fifteenth
day of the second month following the close of the calendar
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year in which the withholding occurs shall make an annual
reporting of taxes withheld and other information prescribed
by the director and send to the department copies of wage and
tax statements with the return income statements required
by subsection 7 . At the discretion of the director, the
withholding agent shall not be required to send wage statements
and tax income statements with the annual reporting return
form report if the information is available from the internal
revenue service or other state or federal agencies.
c. If the director has reason to believe that the collection
of the tax provided for in subsections 1 and 12 is in jeopardy,
the director may require the employer or withholding agent to
make the report file a return as required in subsection 2,
paragraph “a” , and pay the tax at any time, in accordance with
section 422.30 . The director may authorize incorporated banks,
trust companies, or other depositories authorized by law which
are depositories or financial agents of the United States or of
this state, to receive any tax imposed under this chapter , in
the manner, at the times, and under the conditions the director
prescribes. The director shall also prescribe the manner,
times, and conditions under which the receipt of the tax by
those depositories is to be treated as payment of the tax to
the department.
Sec. 20. Section 422.16, subsection 7, Code 2022, is amended
to read as follows:
7. a. Every withholding agent required to deduct and
withhold a tax under subsections 1 and 12 of this section
shall furnish to such employee, nonresident, or other person
in respect of the remuneration income paid by such employer
or withholding agent to such employee, nonresident, or other
person during the calendar year, on or before January 31 of
the succeeding year, or, in the case of employees, if the
employee’s employment is terminated before the close of such
calendar year, within thirty days from the day on which the
last payment of wages or other taxable income is made, if
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requested by such employee, but not later than January 31 of
the following year, a written an income statement showing the
following:
(1) The name and address of such employer or withholding
agent, and the taxpayer identification number of such employer
or withholding agent.
(2) The name of the employee, nonresident, or other person
and that person’s federal social security account taxpayer
identification number, together with the last known address of
such employee, nonresident, or other person to whom wages have
or other taxable income has been paid during such period.
(3) The gross amount of wages , or other taxable income , paid
to the employee, nonresident, or other person.
(4) The total amount deducted and withheld as tax under the
provisions of subsections 1 and 12 of this section .
(5) The total amount of federal income tax withheld.
b. The income statements required to be furnished by this
subsection in respect of any wages or other taxable Iowa income
or any additional information required to be displayed on the
income statement shall be in such form or forms as the director
may, by regulation rule , prescribe.
Sec. 21. Section 422.16, subsection 10, paragraphs a and b,
Code 2022, are amended to read as follows:
a. An In addition to any other penalty provided by law,
an employer or withholding agent required under this chapter
to furnish a statement required by this chapter who willfully
furnishes a false or fraudulent statement, or who willfully
fails to furnish the statement is, for each failure, subject
to a civil penalty of five hundred dollars, the penalty to be
in addition to any criminal penalty otherwise provided by the
Code. to furnish or file an income statement required by this
statement is subject to a civil penalty of five hundred dollars
for each occurrence of the following:
(1) Willful failure to furnish an employee, nonresident, or
other person with an income statement.
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(2) Willfully furnishing an employee, nonresident, or other
person with a false or fraudulent income statement.
(3) Willful failure to file an income statement with the
department.
(4) Willfully filing a false or fraudulent income statement
with the department.
b. In addition to the tax or additional tax, any A person ,
or withholding agent shall pay a , or other person required by
this section to file a return is subject to the penalty as
provided in section 421.27 . Any penalty assessed under section
421.27 shall be in addition to the tax or additional tax due.
The taxpayer shall also pay interest on the tax or additional
tax at the rate in effect under section 421.7 , for each month
counting each fraction of a month as an entire month, computed
from the date the semimonthly, monthly, or quarterly deposit
form was required to be filed. The penalty and interest become
a part of the tax due from the withholding agent.
Sec. 22. Section 422.16, Code 2022, is amended by adding the
following new subsection:
NEW SUBSECTION . 15. The director may allow additional
time for filing documents required under this section with the
department in the case of illness, disability, absence, or if
good cause is shown.
DIVISION VIII
REMITTANCES OF TRANSFER TAX
Sec. 23. Section 428A.8, subsection 1, paragraphs a and c,
Code 2022, are amended to read as follows:
a. On or before the tenth day of each month the county
recorder shall determine and pay remit to the treasurer of
state department of revenue eighty-two and three-fourths
percent of the receipts from the real estate transfer tax
collected during the preceding month and the treasurer of state
department of revenue shall deposit and transfer the receipts
as provided in subsection 2 .
c. Any tax or additional tax found to be due shall be
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collected by the county recorder. If the county recorder
is unable to collect the tax, the director of revenue shall
collect the tax in the same manner as taxes are collected in
chapter 422, subchapter III . If collected by the director
of revenue, the director shall pay remit to the county its
proportionate share of the tax. Section 422.25, subsections
1, 2, 3, and 4 , and sections 422.26 , 422.28 through 422.30 ,
and 422.73 , consistent with this chapter , apply with respect
to the collection of any tax or additional tax found to be due,
in the same manner and with the same effect as if the deed,
instrument, or writing were an income tax return within the
meaning of those statutes.
Sec. 24. Section 428A.8, subsection 2, unnumbered paragraph
1, Code 2022, is amended to read as follows:
The treasurer of state department of revenue shall deposit
or transfer the receipts paid remitted to the treasurer of
state department of revenue pursuant to subsection 1 to either
the general fund of the state, the housing trust fund created
in section 16.181 , or the shelter assistance fund created in
section 16.41 as follows:
Sec. 25. Section 428A.9, Code 2022, is amended to read as
follows:
428A.9 Refund of tax.
To receive a refund from the state the taxpayer shall
petition the state appeal board for a refund of the amount of
overpayment of the tax paid remitted to the treasurer of state
department of revenue . To receive a refund from the county
the taxpayer shall petition the board of supervisors for a
refund of the remaining portion of the overpayment paid to that
county.
DIVISION IX
BOARD OF REVIEW ELIGIBILITY
Sec. 26. Section 441.32, Code 2022, is amended by adding the
following new subsection:
NEW SUBSECTION . 3. If a board member is removed under this
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section, the board member shall not be eligible for appointment
to a board of review in this state for six years following the
date of the removal.
DIVISION X
EQUALIZATION ADJUSTMENTS —— APPEALS
Sec. 27. Section 441.48, Code 2022, is amended to read as
follows:
441.48 Notice of adjustment —— protest appeal —— final
action.
1. Before the department of revenue shall adjust the
valuation of any class of property any such percentage, the
department shall first serve ten days’ notice by mail, on the
county auditor of the county whose valuation is proposed to be
adjusted.
2. If the county or assessing jurisdiction intends
to protest appeal the proposed adjustment, the board of
supervisors or city council, city or county attorney, or
other official of the county or assessing jurisdiction, as
applicable, shall provide the department with written notice of
intent to protest prior to expiration of the ten days’ notice
appeal within ten days of the notice provided by the department
of revenue under subsection 1 .
3. After expiration of the ten days’ notice, the county
or assessing jurisdiction may appear by its city council or
board of supervisors, city or county attorney, or city or
county officials, and make written or oral protest against such
proposed adjustment. Upon receiving a timely notice of intent
to appeal under subsection 2, the department shall schedule a
hearing on the proposed adjustment with the county or assessing
jurisdiction. A county or assessing jurisdiction may submit
an oral presentation at the hearing supported by written
documentation or may submit a written presentation in lieu
of making an oral presentation at a hearing. The county or
assessing jurisdiction shall submit all written documentation
to the department prior to the date of the hearing or, if the
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county or assessing jurisdiction elects a written presentation,
not later than the date the written presentation is submitted.
4. The protest appeal shall consist simply of a statement
of the error, or errors , complained of with such facts and
documentation as may lead to their correction of such errors .
5. Appeals of the proposed adjustment under this section
are not subject to Code chapter 17A. After written protest is
received, or an oral protest is heard the hearing is held or
the written presentation is submitted , the final action may be
taken in reference to the proposed adjustment.
DIVISION XI
BUSINESS PROPERTY TAX CREDIT AND ASSESSMENT LIMITATIONS
Sec. 28. Section 2.48, subsection 3, paragraph f,
subparagraph (5), Code 2022, is amended by striking the
subparagraph.
Sec. 29. Section 331.512, subsection 5, Code 2022, is
amended by striking the subsection.
Sec. 30. Section 331.559, subsection 15, Code 2022, is
amended by striking the subsection.
Sec. 31. Section 357H.9, subsection 1, paragraph d,
subparagraph (2), Code 2022, is amended to read as follows:
(2) The difference between the actual value of the property
as determined by the assessor each year and the percentage
of adjustment certified for that year by the director of
revenue on or before November 1 assessed value of the property
following application of the assessment limitations pursuant to
section 441.21, subsection 9 , multiplied by the actual value of
the property as determined by the assessor, shall be subtracted
from the actual value of the property as determined pursuant to
section 403.19, subsection 1 .
Sec. 32. Section 357H.9, subsection 1, paragraph f,
subparagraph (1), Code 2022, is amended to read as follows:
(1) “Base year taxable value” means the actual value of
the property as determined in section 403.19, subsection 1 ,
multiplied by the percentage of adjustment certified for the
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assessment year specified in section 403.19, subsection 1 ,
by the director of revenue on or before November 1 following
application of the assessment limitations pursuant to section
441.21, subsection 9 .
Sec. 33. Section 403.20, Code 2022, is amended to read as
follows:
403.20 Percentage of adjustment considered in value
assessment.
In determining the assessed value of property within an
urban renewal area which is subject to a division of tax
revenues pursuant to section 403.19 , the difference between the
actual value of the property as determined by the assessor each
year and the percentage of adjustment certified for that year
by the director of revenue on or before November 1 pursuant
to section 441.21, subsection 9 , multiplied by the actual
value of the property as determined by the assessor following
application of the assessment limitations under section 441.21,
subsection 9 , shall be subtracted from the actual value of the
property as determined pursuant to section 403.19, subsection
1 . If the assessed value of the property as determined
pursuant to section 403.19, subsection 1 , is reduced to zero,
the additional valuation reduction shall be subtracted from the
actual value of the property as determined by the assessor.
Sec. 34. Section 426C.2, Code 2022, is amended to read as
follows:
426C.2 Business property tax credit fund —— appropriation.
1. A business property tax credit fund is created in the
state treasury under the authority of the department. For the
fiscal year beginning July 1, 2014, there is appropriated from
the general fund of the state to the department to be credited
to the fund, the sum of fifty million dollars to be used for
business property tax credits authorized in this chapter . For
the fiscal year beginning July 1, 2015, there is appropriated
from the general fund of the state to the department to be
credited to the fund, the sum of one hundred million dollars
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to be used for business property tax credits authorized in
this chapter . For the fiscal year beginning July 1, 2016, and
each fiscal year thereafter beginning before July 1, 2023 ,
there is appropriated from the general fund of the state to the
department to be credited to the fund, the sum of one hundred
twenty-five million dollars to be used for business property
tax credits authorized in this chapter .
2. Notwithstanding section 12C.7, subsection 2 , interest or
earnings on moneys deposited in the fund shall be credited to
the fund. Moneys in the fund are not subject to the provisions
of section 8.33 and shall not be transferred, used, obligated,
appropriated, or otherwise encumbered except as provided in
this chapter . However, moneys remaining in the fund at the end
of the fiscal year beginning July 1, 2022, shall be transferred
by the department for deposit in the general fund of the state.
Sec. 35. NEW SECTION . 426C.10 Future repeal.
This chapter is repealed July 1, 2024.
Sec. 36. Section 441.21, subsection 5, Code 2022, is amended
to read as follows:
5. a. For valuations established as of January 1, 1979,
property valued by the department of revenue pursuant to
chapters 428 , 433 , 437 , and 438 shall be considered as one
class of property and shall be assessed as a percentage of
its actual value. The percentage shall be determined by the
director of revenue in accordance with the provisions of this
section . For valuations established as of January 1, 1979, the
percentage shall be the quotient of the dividend and divisor
as defined in this section . The dividend shall be the total
actual valuation established for 1978 by the department of
revenue, plus ten percent of the amount so determined. The
divisor for property valued by the department of revenue
pursuant to chapters 428 , 433 , 437 , and 438 shall be the
valuation established for 1978, plus the amount of value added
to the total actual value by the revaluation of the property
by the department of revenue as of January 1, 1979. For
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valuations established as of January 1, 1980, property valued
by the department of revenue pursuant to chapters 428 , 433 ,
437 , and 438 shall be assessed at a percentage of its actual
value. The percentage shall be determined by the director of
revenue in accordance with the provisions of this section . For
valuations established as of January 1, 1980, the percentage
shall be the quotient of the dividend and divisor as defined in
this section . The dividend shall be the total actual valuation
established for 1979 by the department of revenue, plus eight
percent of the amount so determined. The divisor for property
valued by the department of revenue pursuant to chapters 428 ,
433 , 437 , and 438 shall be the valuation established for 1979,
plus the amount of value added to the total actual value by the
revaluation of the property by the department of revenue as of
January 1, 1980. For valuations established as of January 1,
1981, and each year thereafter, the percentage of actual value
at which property valued by the department of revenue pursuant
to chapters 428 , 433 , 437 , and 438 shall be assessed shall be
calculated in accordance with the methods provided herein,
except that any references to ten percent in this subsection
shall be eight percent. For valuations established on or after
January 1, 2013, property valued by the department of revenue
pursuant to chapter 434 shall be assessed at a percentage
portion of its actual value equal to the percentage of actual
value determined in the same manner at which property assessed
as commercial property is assessed under paragraph “b” for the
same assessment year.
b. For valuations established on or after January 1, 2013,
commercial property, excluding properties referred to in
section 427A.1, subsection 9 , shall be assessed at a percentage
portion of its actual value, as determined in this paragraph
“b” .
(1) For valuations established for the assessment year
beginning January 1, 2013, the percentage of actual value
as equalized by the department of revenue as provided in
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section 441.49 at which commercial property shall be assessed
shall be ninety-five percent. For valuations established
for the assessment year beginning January 1, 2014, and each
assessment year thereafter beginning before January 1, 2022 ,
the percentage of actual value as equalized by the department
of revenue as provided in section 441.49 at which commercial
property shall be assessed shall be ninety percent.
(2) For valuations established for the assessment year
beginning January 1, 2022, and each assessment year thereafter,
the portion of actual value at which each property unit of
commercial property shall be assessed shall be the sum of the
following:
(a) An amount equal to the product of the assessment
limitation percentage applicable to residential property under
subsection 4 for that assessment year multiplied by the actual
value of the property that exceeds zero dollars but does not
exceed one hundred fifty thousand dollars.
(b) An amount equal to ninety percent of the actual value of
the property for that assessment year that exceeds one hundred
fifty thousand dollars.
c. For valuations established on or after January 1, 2013,
industrial property, excluding properties referred to in
section 427A.1, subsection 9 , shall be assessed at a percentage
portion of its actual value, as determined in this paragraph
“c” .
(1) For valuations established for the assessment year
beginning January 1, 2013, the percentage of actual value
as equalized by the department of revenue as provided in
section 441.49 at which industrial property shall be assessed
shall be ninety-five percent. For valuations established
for the assessment year beginning January 1, 2014, and each
assessment year thereafter beginning before January 1, 2022 ,
the percentage of actual value as equalized by the department
of revenue as provided in section 441.49 at which industrial
property shall be assessed shall be ninety percent.
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(2) For valuations established for the assessment year
beginning January 1, 2022, and each assessment year thereafter,
the portion of actual value at which each property unit of
industrial property shall be assessed shall be the sum of the
following:
(a) An amount equal to the product of the assessment
limitation percentage applicable to residential property under
subsection 4 for that assessment year multiplied by the actual
value of the property that exceeds zero dollars but does not
exceed one hundred fifty thousand dollars.
(b) An amount equal to ninety percent of the actual value of
the property for that assessment year that exceeds one hundred
fifty thousand dollars.
d. For valuations established for the assessment year
beginning January 1, 2019, and each assessment year thereafter,
the percentages or portions of actual value at which property
is assessed, as determined under this subsection , shall not be
applied to the value of wind energy conversion property valued
under section 427B.26 the construction of which is approved by
the Iowa utilities board on or after July 1, 2018.
e. (1) For each fiscal year beginning on or after July 1,
2023, there is appropriated from the general fund of the state
to the department of revenue the sum of one hundred twenty-five
million dollars to be used for payments under this paragraph
calculated as a result of the assessment limitations imposed
under paragraph “b” , subparagraph (2), subparagraph division
(a), and paragraph “c” , subparagraph (2), subparagraph division
(a).
(2) For fiscal years beginning on or after July 1, 2023,
each county treasurer shall be paid by the department of
revenue an amount calculated under subparagraph (4). If an
amount appropriated for the fiscal year is insufficient to make
all payments as calculated under subparagraph (4), the director
of revenue shall prorate the payments to the county treasurers
and shall notify the county auditors of the pro rata percentage
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on or before September 30.
(3) On or before July 1 of each fiscal year, the assessor
shall report to the county auditor that portion of the total
actual value of all commercial property and industrial property
in the county that is subject to the assessment limitations
imposed under paragraph “b” , subparagraph (2), subparagraph
division (a), and paragraph “c” , subparagraph (2), subparagraph
division (a), for the assessment year used to calculate the
taxes due and payable in that fiscal year.
(4) On or before September 1 of each fiscal year, the county
auditor shall prepare a statement, based on the report received
in subparagraph (3) and information transmitted to the county
auditor under chapter 434, listing for each taxing district in
the county:
(a) The product of the portion of the total actual value
of all commercial property, industrial property, and property
valued by the department under chapter 434 in the county
that is subject to the assessment limitations imposed under
paragraph “b” , subparagraph (2), subparagraph division (a), and
paragraph “c” , subparagraph (2), subparagraph division (a), for
the applicable assessment year used to calculate taxes which
are due and payable in the applicable fiscal year multiplied
by the difference, stated as a percentage, between ninety
percent and the assessment limitation percentage applicable
to residential property under subsection 4 for the applicable
assessment year.
(b) The tax levy rate per one thousand dollars of assessed
value for each taxing district for the applicable fiscal year.
(c) The amount of the payment for each county is equal to
the amount determined pursuant to subparagraph division (a),
multiplied by the tax rate specified in subparagraph division
(b), and then divided by one thousand dollars.
(5) The county auditor shall certify and forward one copy of
the statement described in subparagraph (4) to the department
of revenue not later than September 1 of each fiscal year.
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(6) The amounts determined under this paragraph shall
be paid by the department to the county treasurers in equal
installments in September and March of each year. The county
treasurer shall apportion the payments among the eligible
taxing districts in the county and the amounts received by each
taxing authority shall be treated the same as property taxes
paid.
f. For the purposes of this subsection, unless the context
otherwise requires:
(1) “Contiguous parcels” means any of the following:
(a) Parcels that share a common boundary.
(b) Parcels within the same building or structure
regardless of whether the parcels share a common boundary.
(c) Permanent improvements to the land that are situated
on one or more parcels of land that are assessed and taxed
separately from the permanent improvements if the parcels of
land upon which the permanent improvements are situated share
a common boundary.
(2) “Parcel” means the same as defined in section 445.1.
“Parcel” also means that portion of a parcel assigned a
classification of commercial property or industrial property
pursuant to section 441.21, subsection 14, paragraph “b” .
(3) “Property unit” means a parcel or contiguous parcels
all of which are located within the same county, with the same
property tax classification, are owned by the same person, and
are operated by that person for a common use and purpose.
Sec. 37. Section 441.21, subsections 9 and 10, Code 2022,
are amended to read as follows:
9. Not later than November 1, 1979, and November 1 of
each subsequent year, the director shall certify to the
county auditor of each county the percentages of actual
value at which residential property, agricultural property,
commercial property, industrial property, property valued by
the department of revenue pursuant to chapter 434 , and property
valued by the department of revenue pursuant to chapters 428 ,
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433 , 437 , and 438 in each assessing jurisdiction in the county
shall be assessed for taxation , including for assessment years
beginning on or after January 1, 2022, the percentages used to
apply the assessment limitations under subsection 5, paragraphs
“b” and “c” . The county auditor shall proceed to determine
the assessed values of agricultural property, residential
property, commercial property, industrial property, property
valued by the department of revenue pursuant to chapter 434 ,
and property valued by the department of revenue pursuant to
chapters 428 , 433 , 437 , and 438 by applying such percentages
to the current actual value of such property, as reported to
the county auditor by the assessor, and the assessed values so
determined shall be the taxable values of such properties upon
which the levy shall be made.
10. The percentage percentages of actual value computed
by the department of revenue for agricultural property,
residential property, commercial property, industrial property,
property valued by the department of revenue pursuant to
chapter 434 , and property valued by the department of revenue
pursuant to chapters 428 , 433 , 437 , and 438 , including for
assessment years beginning on or after January 1, 2022, the
percentages used to apply the assessment limitations under
subsection 5, paragraphs “b” and “c” , and used to determine
assessed values of those classes of property does do not
constitute a rule as defined in section 17A.2, subsection 11 .
Sec. 38. RETROACTIVE APPLICABILITY. This division of this
Act applies retroactively to assessment years beginning on or
after January 1, 2022.
DIVISION XII
WAGE ASSIGNMENT NOTICE
Sec. 39. Section 421.17B, subsection 3, paragraph a, Code
2022, is amended to read as follows:
a. (1) The facility may proceed under this section only if
twenty days’ notice of intent has been provided sent by regular
mail to the last known address of the obligor, notifying
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the obligor that the obligor is subject to this section and
the facility intends to use the process established in this
section . If the facility determines that collection of the
debt may be in jeopardy, the facility may request that the
employer deliver notice of the wage assignment simultaneously
with the remainder of or in lieu of the obligor’s compensation
due from the employer. The twenty days’ notice period shall
not be required if the facility determines that the collection
of past due amounts would be jeopardized.
(2) The facility may obtain one or more wage assignments
of an obligor who is subject to this section . If the obligor
has more than one employer, the facility may receive wage
assignments from one or more of the employers until the full
debt obligation of the obligor is satisfied. If an obligor has
more than one employer, the facility shall give notice to all
employers from whom an assignment is sought.
Sec. 40. Section 421.17B, subsection 3, paragraph b,
unnumbered paragraph 1, Code 2022, is amended to read as
follows:
The facility shall notify an obligor subject to this section
of the initiation of the wage assignment action. The notice of
initiation from the facility to the obligor shall be sent by
regular mail within two working days of sending the notice to
the employer pursuant to subsection 6, paragraph “b” , and shall
contain all of the following:
Sec. 41. Section 421.17B, subsection 4, Code 2022, is
amended by adding the following new paragraph:
NEW PARAGRAPH . c. The facility may obtain multiple wage
assignments of an obligor who is subject to this section. If
the obligor has multiple employers, the facility may receive
wage assignments from each employer until the full debt
obligation of the obligor is satisfied. The facility shall
give notice to each employer when the facility is seeking a
wage assignment.
Sec. 42. Section 421.17B, subsection 6, paragraph b, Code
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2022, is amended to read as follows:
b. The To initiate a wage assignment, the facility shall
send a notice to the employer within fourteen days of sending
more than twenty days after the notice of the wage assignment
intent to use the levy process is sent to the obligor pursuant
to subsection 3, paragraph “a” . The notice shall inform the
employer of the amount to be assigned to the facility from each
wage, salary, or payment period that is due the obligor. The
facility may receive assignment of up to one hundred percent
of the obligor’s disposable income, salary, or payment for any
given period until the full obligation to the facility is paid
in full.
Sec. 43. Section 421.17B, subsection 9, paragraph a,
unnumbered paragraph 1, Code 2022, is amended to read as
follows:
A notice of wage assignment given sent to the obligor under
this section is effective without the serving of another notice
until the earliest of either earlier of the following:
DIVISION XIII
OUT-OF-STATE RECIPROCAL COLLECTIONS
Sec. 44. Section 421.24, Code 2022, is amended by striking
the section and inserting in lieu thereof the following:
421.24 Reciprocal interstate enforcement.
1. For the purposes of this section, the terms “tax” and
“taxes” include interest and penalties due under any taxing
statute, and liability for interest or penalties, or both,
due under a taxing statute of another state or a political
subdivision of another state, and shall be recognized and
enforced by the courts of this state to the same extent that
the laws of the other state permit the enforcement of liability
for interest or penalties, or both, due under a taxing statute
of this state or a political subdivision of this state.
2. a. The director of revenue shall have the authority
to enter into an agreement with a department or agency of any
other state for the department or agency of the other state to
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collect delinquent accounts, charges, fees, loans, taxes, or
other indebtedness owed to, placed with, or being collected
by the central debt collection facility of the department of
revenue. The department may retain from the amounts collected
a fee established by agreement with the department or agency
of the other state.
b. The director of revenue shall have the authority to
enter into an agreement with a department or agency of any
other state for the centralized debt collection facility to
collect delinquent accounts, charges, fees, loans, taxes, or
other indebtedness owed to, placed with, or being collected
by the other state. The obligations or indebtedness of the
other state referred to the facility must be delinquent and not
subject to litigation, claim, appeal, or review pursuant to the
appropriate remedies of the state. The department may retain
from the amounts collected a fee established by agreement with
the department or agency of the other state.
c. Upon referral of a delinquent balance from the department
or agency of another state pursuant to paragraph “b” , the
department shall send written notification to the obligor by
regular mail to the obligor’s last known mailing address. The
notification shall contain an explanation of the balance owed,
the department or agency to which the balance is owed, that the
department has entered into an agreement to collect the balance
owed, and the obligor’s opportunity to give written notice of
intent to contest the department’s right to collect the amount
owed.
3. a. Challenges under this section may be initiated
only by an obligor. The department’s review of its right to
reciprocal collection is not subject to chapter 17A.
b. The obligor challenging the reciprocal collection shall
submit a written challenge in the manner provided in the notice
described in subsection 2, paragraph “c” , within fifteen days of
the date of the notice.
c. The department, upon receipt of a written challenge,
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shall provide written notice of the challenge to the referring
department or agency. The department shall review the
information provided by the referring department or agency and
shall obtain additional information if necessary to establish
that the liability is delinquent and not subject to appeal, or
to verify the identity of the obligor or the amount owed. The
department shall set a time to occur within ten days of receipt
of the challenge to review the relevant facts of the challenge
with the obligor. An alternative time may be set at the
request of the obligor. If the obligor does not participate in
the review at the scheduled time and an alternative time is not
requested and approved, the review shall take place without the
obligor being present. Only a determination that the referred
liability is not delinquent or is subject to challenge or a
mistake of fact, including a mistake in the identity of the
obligor, or a mistake in the amount owed, shall be considered
as a reason to reject the referred liability.
d. If the department determines that a mistake of fact
has occurred or that the liability is not delinquent or is
subject to challenge, the department shall reject referral of
the liability and shall take no further action to collect the
liability.
e. If the department finds no mistake of fact and that
the liability is delinquent and not subject to challenge,
the department shall deny the challenge and provide a notice
of that effect to the obligor and may proceed to collect the
balance owed.
4. a. At the request of the director the attorney general
may bring suit in the name of this state, in the appropriate
court of any other state to collect any tax legally due in
this state, and any political subdivision of this state or the
appropriate officer, acting in its behalf, may bring suit in
the appropriate court of any other state to collect any tax
legally due to such political subdivision.
b. The courts of this state shall recognize and enforce
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liabilities for taxes lawfully imposed by any other state, or
any political subdivision of the other state, which extends
a like comity to this state, and the duly authorized officer
of any such state or a political subdivision of such state may
sue for the collection of such tax in the courts of this state.
A certificate by the secretary of state of such other state
that an officer suing for the collection of such a tax is duly
authorized to collect the same shall be conclusive proof of
such authority.
c. The courts of this state shall not enforce interest
rates or penalties on taxes of any other state which exceed the
interest rates and penalties imposed by the state of Iowa for
the same or a similar tax.
5. Thirty days following the mailing of notice pursuant
to subsection 2, paragraph “c” , if no written challenge is
received, or upon the department providing notice of denial
of a challenge pursuant to subsection 3, paragraph “e” , any
tax amount referred to the facility under subsection 2 shall
be treated as the equivalent of individual income tax that is
final, due and payable, and may be collected in any manner
authorized under the law for collection of a delinquent tax
liability, including but not limited to the recording of a
notice of state tax lien or issuance of a distress warrant.
6. The department may release information otherwise
confidential under section 422.20 or 422.72 to the department
or agency of the other state, provided the department or agency
of the other state agrees to keep such information confidential
as defined by Iowa law. An employee or contractor of the
department or agency of the other state shall not be required
to complete the confidentiality training or acknowledgment
requirements of the department.
DIVISION XIV
PASS-THROUGH ENTITY TAXATION
Sec. 45. Section 422.25A, subsection 3, Code 2022, is
amended to read as follows:
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3. State partnership pass-through representative.
Notwithstanding any other law to the contrary, the state
partnership pass-through representative for the reviewed
year shall have the sole authority to act on behalf of
the partnership or pass-through entity with respect to an
action required or permitted to be taken by a partnership or
pass-through entity under this section or section 422.28 or
422.29 with respect to final federal partnership adjustments
arising from a partnership level audit or an administrative
adjustment request, and its direct partners and indirect
partners shall be bound by those actions.
Sec. 46. Section 422.25A, subsection 4, paragraph a,
subparagraph (3), Code 2022, is amended to read as follows:
(3) File an amended composite return under section 422.13 ,
Code 2021, or under section 422.16B, as applicable, if one
was originally required to be filed, and if applicable for
withholding from partners, file an amended withholding report
under section 422.16 , Code 2021, and pay the additional amount
under this title that would have been due had the final federal
partnership adjustments been reported properly as required,
including any applicable interest and penalties.
Sec. 47. Section 422.25A, subsection 4, paragraph b,
subparagraph (3), Code 2022, is amended to read as follows:
(3) If the direct partner is a tiered partner and subject to
section 422.13 , Code 2021, or section 422.16B, file an amended
composite return under section 422.13 , Code 2021, or under
section 422.16B, as applicable, if such return was originally
required to be filed, and if applicable for withholding from
partners file an amended withholding report under section
422.16 , Code 2021, if one was originally required to be filed.
Sec. 48. Section 422.25A, subsection 4, paragraph c,
subparagraph (3), Code 2022, is amended to read as follows:
(3) Within ninety days after the time for filing and
furnishing statements to tiered partners and their partners as
established by section 6226 of the Internal Revenue Code and
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the regulations thereunder, if the indirect partner is a tiered
partner and subject to section 422.13 , Code 2021, or section
422.16B , file an amended composite return under section 422.13 ,
Code 2021, or under section 422.16B, as applicable, if such
return was originally required to be filed, and if applicable
for withholding from partners, file an amended withholding
report under section 422.16 , Code 2021, if one was originally
required to be filed.
Sec. 49. Section 422.25B, Code 2022, is amended to read as
follows:
422.25B State partnership pass-through representative.
1. As used in this section , all words and phrases defined
in section 422.25A shall have the same meaning given them by
that section.
2. The state partnership pass-through representative for
the reviewed year for a partnership shall be the partnership’s
federal partnership representative with respect to an action
required or permitted to be taken by a state partnership
pass-through representative under this chapter for a reviewed
year, unless the partnership designates in writing another
person as the state partnership pass-through representative as
provided in subsection 3 . The state partnership pass-through
representative for the reviewed year for a pass-through entity
is the person designated in subsection 3 .
3. The department may establish reasonable qualifications
for a person to be a state partnership pass-through
representative. If a partnership desires to designate a
person other than the federal partnership representative, the
partnership shall designate such person in the manner and
form prescribed by the department. A pass-through entity
shall designate a person as the state partnership pass-through
representative in the manner and form prescribed by the
department. A partnership or pass-through entity shall be
allowed to change such designation by notifying the department
at the time the change occurs in the manner and form prescribed
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by the department.
4. The department may adopt any rules pursuant to chapter
17A to implement this section .
Sec. 50. Section 422.25C, subsections 2 and 3, Code 2022,
are amended to read as follows:
2. For tax years beginning on or after January 1, 2020, any
adjustments to a partnership’s or pass-through entity’s items
of income, gain, loss, expense, or credit, or an adjustment to
such items allocated to a partner that holds an interest in a
partnership or pass-through entity for the reviewed year by
the department as a result of a state partnership audit, shall
be determined at the partnership level or pass-through entity
level in the same manner as provided by section 6221(a) of the
Internal Revenue Code and the regulations thereunder unless a
different treatment is specifically provided in this title .
The provisions of sections 6222, 6223, and 6227 of the Internal
Revenue Code and the regulations thereunder shall also apply to
a partnership or pass-through entity and its direct or indirect
partners in the same manner as provided in such sections unless
a different treatment is specifically provided in this title .
For purposes of applying such sections, due account shall be
made for differences in federal and Iowa terminology. The
adjustment provided by section 6221(a) of the Internal Revenue
Code shall be determined as provided in such section but shall
be based on Iowa taxable income or other tax attributes of
the partnership or pass-through entity as determined pursuant
to this chapter for the reviewed year. The department shall
issue a notice of adjustment to the partnership or pass-through
entity. Such notice shall be treated as an assessment for
the purposes of section 422.25 , and the notice shall be
appealable by the partnership or pass-through entity pursuant
to sections 422.28 and 422.29 and shall be issued within the
time period provided by section 422.25 . Once the adjustments
to partnership-related or pass-through entity-related items or
reallocations of income, gains, losses, expenses, credits, and
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other attributes among such partners for the reviewed year are
finally determined, the partnership or pass-through entity and
any direct partners or indirect partners shall then be subject
to the provisions of section 422.25, subsection 1 , paragraph
“e” , and section 422.25A in the same manner as if the state
partnership audit were a federal partnership level audit, and
as if the final state partnership audit adjustment were a final
federal partnership adjustment. The penalty exceptions in
section 421.27, subsection 2 , paragraphs “b” and “c” , shall not
apply to a state partnership audit.
3. The state partnership pass-through representative for
the reviewed year as determined under section 422.25B shall
have the sole authority to act on behalf of the partnership
or pass-through entity with respect to an action required or
permitted to be taken by a partnership or pass-through entity
under this section , including proceedings under section 422.28
or 422.29 , and the partnership’s or pass-through entity’s
direct partners and indirect partners shall be bound by those
actions.
Sec. 51. COMPOSITE RETURN UNUSED TAX CREDIT CARRYFORWARDS
FROM TAX YEAR 2021. Notwithstanding any other provision
of law to the contrary, if a pass-through entity filing
composite returns under section 422.13, subsection 5, Code
2021, has a nonrefundable income tax credit carryforward amount
attributable to the composite return following the close of
the entity’s composite return tax year that began during the
2021 calendar year, the pass-through entity may allocate those
income tax credit carryforward amounts to the pass-through
entity’s partners, members, beneficiaries, or shareholders in
the pass-through entity’s tax year that begins during the 2022
calendar year, in the amount designated by the pass-through
entity and in the manner and form prescribed by the department
of revenue. The income tax credit shall be the same in the
hands of the partner, member, beneficiary, or shareholder as in
the pass-through entity, and may be claimed for any tax year
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that the pass-through entity could have claimed the tax credit.
DIVISION XV
INHERITANCE TAX —— UNKNOWN HEIRS
Sec. 52. Section 450.93, Code 2022, is amended to read as
follows:
450.93 Unknown heirs.
1. Whenever For a decedent dying before January 1, 2021,
whenever the heirs or persons entitled to any estate or any
interest therein are unknown or their place of residence
cannot with reasonable certainty be ascertained, a tax of five
percent shall be paid to the department of revenue upon all
such estates or interests, subject to refund as provided herein
in other cases; provided, however, that if it be afterwards
determined that any estate or interest passes to aliens, there
shall be paid within sixty days after such determination and
before delivery of such estate or property, an amount equal to
the difference between five percent, the amount paid, and the
amount which such person should pay under the provisions of
this chapter .
2. a. For a decedent dying on or after January 1, 2021,
but before January 1, 2022, the tax imposed in subsection 1
shall be reduced by twenty percent, and rounded to the nearest
one-hundredth of one percent.
b. For a decedent dying on or after January 1, 2022,
but before January 1, 2023, the tax imposed in subsection 1
shall be reduced by forty percent, and rounded to the nearest
one-hundredth of one percent.
c. For a decedent dying on or after January 1, 2023,
but before January 1, 2024, the tax imposed in subsection 1
shall be reduced by sixty percent, and rounded to the nearest
one-hundredth of one percent.
d. For a decedent dying on or after January 1, 2024, but
before January 1, 2025, the tax imposed in subsection 1 shall
be reduced by eighty percent, and rounded to the nearest
one-hundredth of one percent.
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3. For a decedent dying on or after January 1, 2025, the tax
in subsection 1 shall not be imposed.
Sec. 53. RETROACTIVE APPLICABILITY. This division of this
Act applies retroactively to January 1, 2021.
DIVISION XVI
NOTICE REQUIREMENTS FOR PUBLICATION OF INTEREST RATES
Sec. 54. Section 421.7, subsection 6, Code 2022, is amended
to read as follows:
6. In November of each year the director shall cause an
advisory notice to be published in the Iowa administrative
bulletin and in a newspaper of general circulation in this
state on the internet site of the department , stating the
rate of interest to be in effect on or after January 1 of
the following year, as established by this section . The
calculation and publication of the rate of interest by the
director is exempt from chapter 17A .
DIVISION XVII
PROPERTY ASSESSMENT APPEAL BOARD —— SALARIES
Sec. 55. 2008 Iowa Acts, chapter 1191, section 14,
subsection 5, as amended by 2013 Iowa Acts, chapter 123,
section 63, 2018 Iowa Acts, chapter 1163, section 8, and 2018
Iowa Acts, chapter 1165, section 81, is amended to read as
follows:
5. The following are range 5 positions: administrator of
the division of homeland security and emergency management of
the department of public defense, state public defender, drug
policy coordinator, labor commissioner, workers’ compensation
commissioner, executive director of the college student aid
commission, director of the department of cultural affairs,
director of the department of elder affairs, director of the
law enforcement academy, members of the property assessment
appeal board, executive director of the department of veterans
affairs, and administrator of the historical division of the
department of cultural affairs.
Sec. 56. 2008 Iowa Acts, chapter 1191, section 14,
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subsection 6, is amended to read as follows:
6. The following are range 6 positions: director of the
office of energy independence, superintendent of banking,
superintendent of credit unions, administrator of the alcoholic
beverages division of the department of commerce, director of
the department of inspections and appeals, commandant of the
Iowa veterans home, commissioner of public safety, commissioner
of insurance, executive director of the Iowa finance authority,
director of the department of natural resources, consumer
advocate, members of the property assessment appeal board, and
chairperson of the utilities board. The other members of the
utilities board shall receive an annual salary within a range
of not less than 90 percent but not more than 95 percent of the
annual salary of the chairperson of the utilities board.
Sec. 57. APPLICABILITY. This division of this Act applies
to fiscal years beginning on or after July 1, 2022, effective
with the pay period beginning June 24, 2022, and subsequent pay
periods.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
This bill relates to state and local finances and the duties
and procedures of the department of revenue by providing for
electronic filing, communications, and records, modifying
transfer tax remittances, the assessment of property, the
collection of debt, and the taxation of pass-through entities,
reducing inheritance taxes for unknown heirs, and establishing
salaries.
DIVISION I —— RECORD RETENTION. Currently, the director of
the department of revenue (DOR) may destroy useless records of
any taxpayer filed with or kept by the department. The bill
specifies that the director of revenue (director) shall destroy
useless records by the end of the calendar year following the
year in which the records are determined to be useless. The
bill permits a taxpayer or the DOR to request the director
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retain a useless record under certain circumstances. The
bill also permits DOR to retain some records if personally
identifiable information has been removed, or the records are
related to a rule, statement of law or policy, or a final
order, decision, or opinion.
The bill allows DOR to make electronic copies of records or
use other methods to make such copies.
The division takes effect January 1, 2025.
DIVISION II —— ELECTRONIC FILING —— FIDUCIARIES —— BUSINESS
ENTITIES. The bill requires a fiduciary to file an electronic
return under any of the following certain circumstances: the
individual, estate, or trust has gross receipts of $250,000 or
more; the fiduciary is required to provide 10 or more schedules
K-1 to the beneficiaries; or the fiduciary reports $25,000 or
more of Iowa tax credits.
The bill requires a partnership to file an electronic return
under any of the following circumstances: the partnership has
gross receipts of $250,000 or more; the partnership is required
to provide 10 or more schedules K-1 to the partners; or the
partnership reports $25,000 or more of Iowa tax credits.
If a pass-through entity that is required to file a composite
return is required to file an electronic return under section
422.14, 422.15, or 422.36, the bill requires the pass-through
entity to file the composite return of the pass-through entity
in an electronic format for the same taxable year. A composite
return generally is a return filed by a pass-through entity
that reports the state income of all nonresident owners.
The bill requires a corporation to file an electronic return
if the corporation has gross receipts of $250,000 or more, or
the corporation reports $25,000 or more of Iowa tax credits, or
in the case of an S corporation, the corporation is required to
issue 10 or more schedules K-1 to the shareholders.
The bill requires an affiliated group of corporations to
file an electronic return regardless of the amount of gross
receipts of the affiliated group or Iowa tax credits claimed.
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The bill requires a financial institution (bank) to file an
electronic return under any of the following circumstances:
the financial institution has gross receipts of $250,000 or
more; the financial institution reports $25,000 or more of Iowa
tax credits, or in the case of an S corporation, the financial
institution is required to issue 10 or more schedules K-1 to
the shareholders.
The division applies to tax years ending on or after December
31, 2022, for a partnership, pass-through entity, corporation,
and financial institution, and applies to tax years ending on
or after December 31, 2023, for a fiduciary, or for tax years
ending on or after December 31 of the calendar year in which
the department implements a system for receiving the electronic
returns required by the division.
DIVISION III —— ELECTRONIC FILING —— CREDIT UNIONS. The
bill requires a credit union to file a return in an electronic
format specified by DOR.
The division applies to tax years ending on or after December
31, 2024, or for tax years ending on or after December 31 of the
calendar year in which the department implements a system for
receiving the electronic returns required by the division.
DIVISION IV —— AUTHORITY TO CHARGE FEES. The bill specifies
DOR may charge a fee for a copy of a return. The fee may be
established by rule.
The bill also specifies that this division shall not be
construed to prohibit DOR from charging a fee for a copy of
a return prior to the enactment of the division pursuant to
another authority of DOR.
DIVISION V —— AUTHORITY TO ACT ON BEHALF OF TAXPAYER. The
bill strikes and replaces provisions relating to the authority
to act on behalf of a business entity, and specifies that such
a person must be designated to act on behalf of the business
entity in tax matters.
The bill specifies DOR may authorize a trustee to have
authority to act on behalf of a taxpayer, if the trustee
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complies with certain conditions requested by DOR including but
not limited to providing a copy of the trust agreement.
The bill specifies DOR may authorize a person named as
general or durable power of attorney to act on behalf of
a taxpayer if the person is named in a document which is
currently in force.
The bill requires a person acting on behalf of a taxpayer
must certify that the person possesses actual authority to act
on behalf of the entity in tax matters.
The bill allows DOR to require any documents or other
evidence to demonstrate an individual has authority to act on
behalf of the taxpayer before DOR.
DIVISION VI —— ELECTRONIC COMMUNICATION. Under the
bill, DOR may permit a person to elect to receive a notice,
correspondence, or other communication electronically.
If a person makes an election to receive an electronic
communication, the posting of the electronic communication
to the electronic portal of DOR satisfies any requirement of
mailing or personal service in title X (financial resources),
Code chapter 272D (debt owed state or local government), or
Code sections 321.105A (fee for new registration) and 533.329
(taxation of credit unions).
The bill allows DOR to send any notice, correspondence, or
other communication by mail to a person who has elected to
receive an electronic communication.
DIVISION VII —— INCOME STATEMENTS TO BE PROVIDED TO
THE DEPARTMENT. The bill updates and amends Code section
422.16(10)(a) relating to the penalties for willful violations
of the following: failure to furnish an employee with an
income statement; furnishing a false or fraudulent income
statement to an employee; failure to file an income statement
with DOR; filing a false or fraudulent income statement with
DOR; failure to file an annual reporting of taxes withheld with
DOR; and filing a false or fraudulent annual reporting of taxes
withheld with DOR. Under the bill and in current law, each
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violation is punishable by a $500 civil penalty.
The bill amends Code section 422.16(10)(b) to specify that a
person, withholding agent, or other person required to file a
withholding return shall be subject to the penalties provided
in Code section 421.27 in addition to the tax or additional tax
due.
The bill provides that the director may allow additional
time for the filing of documents required by section 422.16
(withholding income tax) in the case of illness, disability,
absence, or if good cause is shown.
DIVISION VIII —— REMITTANCES OF TRANSFER TAX. Currently,
the county recorder remits the real estate transfer tax to
the treasurer of state. The bill changes the remittances
of the transfer tax by the county recorder and requires the
remittances of the transfer tax by the county recorder be made
to the department of revenue.
DIVISION IX —— BOARD OF REVIEW ELIGIBILITY. The bill amends
Code section 441.32 relating to the removal of a member of a
board of review by specifying that if a board member is removed
under that Code section, the board member shall not be eligible
for appointment to a board of review in this state for six
years following the date of the removal.
DIVISION X —— EQUALIZATION ADJUSTMENTS —— APPEALS. The
bill amends Code section 441.48 to provide that, in addition
to the board of supervisors or the city council, a city or
county attorney or other official of the county or assessing
jurisdiction may provide written notice of intent to appeal
an equalization to the department of revenue. The bill also
requires the written notice of appeal to be provided within
10 days of the notice provided by the department of revenue.
Upon receiving a timely notice of intent to appeal, the bill
requires the department to schedule a hearing on the proposed
adjustment with the county or assessing jurisdiction and
specifies the allowable formats for the hearing or written
presentation of the appeal. The bill specifies that appeals of
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a proposed adjustment are not subject to Code chapter 17A.
DIVISION XI —— BUSINESS PROPERTY TAX CREDIT AND ASSESSMENT
LIMITATION. Code chapter 426C provides a business property tax
credit for commercial, industrial, and railway property for
property taxes due and payable in fiscal years beginning on or
after July 1, 2014. The business property tax credit is funded
from an annual standing appropriation of $125 million.
The bill eliminates the annual appropriation for the
business property tax credit under Code section 426C.2 for
fiscal years beginning on or after July 1, 2023, and provides
that moneys remaining in the business property tax credit fund
at the end of the fiscal year beginning July 1, 2022, shall be
transferred by the department of revenue for deposit in the
general fund of the state. The bill also establishes a future
repeal date for Code chapter 426C of July 1, 2024.
Current Code section 441.21 imposes an assessment limitation
(rollback) on commercial property, industrial property,
and property valued by the department of revenue under Code
chapter 434 (railway company property) of 90 percent for
assessment years beginning on or after January 1, 2014. The
bill modifies the amount and methodology for calculating the
assessment limitation for property units, as defined in the
bill, within those classifications of property. Instead of a
uniform percentage of value, for valuations established for the
assessment year beginning January 1, 2022, and each assessment
year thereafter, the portion of actual value at which each
property unit of commercial property shall be assessed shall be
the sum of the following: (1) an amount equal to the product of
the assessment limitation percentage applicable to residential
property multiplied by the actual value of the property that
exceeds $0 but does not exceed $150,000; and (2) an amount
equal to 90 percent of the actual value of the property
for that assessment year that exceeds $150,000. The bill
establishes a similar provision for industrial property and
provides that the assessed value of railway company property
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shall be determined in the same manner as commercial property.
The bill also establishes an annual payment to local
governments based on the modified assessment limitations
imposed on that portion of the value of commercial and
industrial properties that does not exceed $150,000. For
each fiscal year beginning on or after July 1, 2023, there
is appropriated from the general fund of the state to the
department of revenue the sum of $125 million to be used for
such payments. If an amount appropriated for a fiscal year
is insufficient to make all payments, the director of revenue
shall prorate the payments to the county treasurers.
DIVISION XII —— WAGE ASSIGNMENT NOTICE. The bill modifies
Code section 421.17B (administrative wage assignment
cooperative agreement). Under the bill, the centralized
debt collection facility (facility) within the department of
revenue may proceed against an obligor if a 20 days’ notice
of intent has been sent to the obligor notifying the obligor
the facility intends to begin a wage assignment action. The
bill specifies the 20 days’ notice period does not apply if the
facility determines the collection of past due amounts would
be in jeopardy. After the 20 days’ notice period has run,
the bill requires the facility to notify the obligor of the
initiation of the wage assignment action within two working
days of sending the notice to the obligor’s employer, and the
facility may obtain multiple wage assignments, if the obligor
has multiple employers.
DIVISION XIII —— OUT-OF-STATE RECIPROCAL COLLECTIONS. The
bill modifies provisions related to out-of-state reciprocal
debt collections. Currently, the provisions are limited to
the collection of out-of-state tax debt. The bill expands
the types of debt the director is able to collect, and allows
the director to enter into an agreement with a department in
another state to collect the debts being collected by DOR. The
bill allows the director to enter into agreements to collect
the debts of another state through DOR. The bill requires the
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out-of-state debt being collected by DOR to be delinquent and
not subject to litigation prior to accepting the collection on
such debt.
The bill establishes procedures to collect out-of-state debt
including procedures for challenging the collection of such
debt. The bill allows DOR to collect a fee from the amount of
out-of-state debt collected.
The bill specifies the DOR may release taxpayer information
that otherwise would be confidential when working with an
out-of-state department or agency, provided the out-of-state
department or agency complies with Iowa confidentiality law.
DIVISION XIV —— PASS-THROUGH ENTITY TAXATION. The bill
changes the term “state partnership representative” to “state
pass-through representative” numerous times.
The bill permits a pass-through entity filing a composite
return that has a nonrefundable income tax credit carryforward
amount attributable to the composite return following the
close of the entity’s composite return for the tax year that
began during the 2021 calendar year to allocate those income
tax credit carryforward amounts to the pass-through entity’s
partners, members, beneficiaries, or shareholders in the
pass-through entity’s tax year that begins during the 2022
calendar year.
DIVISION XV —— INHERITANCE TAX —— UNKNOWN HEIRS. Currently,
if an heir entitled to an estate interest cannot be found,
a tax of 5 percent is paid to the state, until the heir is
found, and at such time the correct amount of inheritance tax
is recomputed and paid to the state. The bill reduces the
inheritance tax on an unknown heir on the same percentage basis
the inheritance tax is being reduced in Code section 450.10.
The inheritance tax is set to be repealed for decedents dying
on or after January 1, 2025.
The division applies retroactively to January 1, 2021.
DIVISION XVI —— NOTICE REQUIREMENTS FOR PUBLICATION OF
INTEREST RATES. The bill strikes a provision requiring the
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director to publish the rate of interest in a newspaper, and
substitutes this requirement by allowing for the publication of
interest rates on the internet site of DOR.
DIVISION XVII —— PROPERTY ASSESSMENT APPEAL BOARD ——
SALARIES. The general assembly periodically establishes salary
ranges for certain appointed state officers and authorizes a
person (generally the governor) to establish the salaries of
those state officers. In 2013, the general assembly amended
the most recent salary range legislation (2008 Iowa Acts,
chapter 1191) to add members of the property assessment appeal
board to salary range 5 ($73,250 to $112,070). The bill moves
members of the property assessment appeal board to salary range
6 ($84,240 to $128,890) with the pay period beginning June 24,
2022.
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