Bill Text: IA SF2367 | 2021-2022 | 89th General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: A bill for an act relating to state taxation by specifying when returns are due, striking sales tax exemptions and exempting other products, and modifying distributions of revenue to local governments and school districts, the liability of sellers, the franchise tax, motor fuel tax reporting, tax refunds and credits, and the individual state income tax, and providing penalties, and including effective date, applicability, and retroactive applicability provisions. (Formerly SSB 3063.) Effective date: 07/01/2022, 01/01/2024, 06/17/2022, 01/01/2023. Applicability date: 01/01/2019, 01/01/2022, 06/17/2022.

Spectrum: Committee Bill

Status: (Passed) 2022-06-17 - Signed by Governor. S.J. 942. [SF2367 Detail]

Download: Iowa-2021-SF2367-Introduced.html

---

Senate File 2367 - Introduced
SENATE FILE 2367
BY COMMITTEE ON WAYS AND MEANS
(SUCCESSOR TO SSB 3063)
A BILL FOR
An Act relating to sales, use, and motor vehicle fuel taxes
administered by the department of revenue including
distributions to local governments and school districts, the
liability of sellers, tax refund and tax credit incentives,
and motor fuel tax reporting modifications, and providing
penalties, and including effective date and applicability
provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
TLSB 5284SV (2) 89
jm/jh

S.F. 2367
DIVISION I
SALES, USE, AND EXCISE TAX —— RETURNS DUE
Section 1. Section 9C.3, subsection 3, Code 2022, is amended
to read as follows:
3. The application shall state whether or not the applicant
has an Iowa retailers sales or use tax permit and if the
applicant has such permit, shall state the number of such
permit.
Sec. 2. Section 9C.5, Code 2022, is amended to read as
follows:
9C.5 Issuance of license.
Upon receiving an application for a transient merchant’s
license, the secretary of state shall investigate or cause to
be investigated, the reputation and character of the applicant.
If, upon making such investigation, the secretary of state is
satisfied that the statements and representations contained in
the application are true, and that the applicant is of good
reputation and character, and the holder of an Iowa retailer’s
sales or use tax permit, and if a foreign corporation, has
authority to do business in the state of Iowa, the secretary
shall issue to the applicant a license as a transient merchant
upon payment of the fee as herein prescribed for the period of
time requested in said application and for use at the location
and place where it is stated in said application the sale will
be held or the business conducted, both of which shall be set
out in said license. Such license shall be valid only for the
period of time and at the location and place described therein.
Sec. 3. Section 99G.30A, subsection 2, paragraph c, Code
2022, is amended to read as follows:
c. Frequency of deposits and quarterly monthly reports of
the monitor vending machine excise tax with the department of
revenue are governed by the tax provisions in section 423.31 .
Monitor vending machine excise tax collections shall not be
included in computation of the total tax to determine frequency
of filing under section 423.31 .
-1-
LSB 5284SV (2) 89
jm/jh 1/ 27

S.F. 2367
Sec. 4. Section 321.105A, subsection 4, paragraph b, Code
2022, is amended to read as follows:
b. Section 422.25, subsection 4 , sections 422.30 , 422.67 ,
and 422.68 , section 422.69, subsection 1 , sections 422.70 ,
422.71 , 422.72 , 422.74 , and 422.75 , section 423.14, subsection
2 , and sections 423.23 , 423.24 , 423.25 , 423.32 , 423.33 , 423.35 ,
423.37 through 423.42 , 423.45 , and 423.47 , consistent with the
provisions of this section , apply with respect to the fees
for new registration authorized under this section in the
same manner and with the same effect as if the fees for new
registration were retail use taxes within the meaning of those
statutes.
Sec. 5. Section 421.26, Code 2022, is amended to read as
follows:
421.26 Personal liability for tax due.
If a licensee or other person under section 452A.65 , a
retailer or purchaser under chapter 423A , 423B , 423C , 423D ,
or 423E , or section 423.14 , 423.14A , 423.29 , 423.31 , 423.32 ,
or 423.33 , or a user under section 423.34 , or a permit holder
or licensee under section 453A.13 , 453A.16 , or 453A.44 fails
to pay a tax under those sections when due, an officer of a
corporation or association, notwithstanding section 489.304 ,
a member or manager of a limited liability company, or a
partner of a partnership, having control or supervision of
or the authority for remitting the tax payments and having
a substantial legal or equitable interest in the ownership
of the corporation, association, limited liability company,
or partnership, who has intentionally failed to pay the tax
is personally liable for the payment of the tax, interest,
and penalty due and unpaid. However, this section shall
not apply to taxes on accounts receivable. The dissolution
of a corporation, association, limited liability company,
or partnership shall not discharge a person’s liability for
failure to remit the tax due.
Sec. 6. Section 423.2, subsection 1, paragraph b, Code 2022,
-2-
LSB 5284SV (2) 89
jm/jh 2/ 27

S.F. 2367
is amended to read as follows:
b. Sales of building materials, supplies, and equipment
to owners, contractors, subcontractors, or builders for the
erection of buildings or the alteration, repair, or improvement
of real property are retail sales of tangible personal property
in whatever quantity sold. Where the owner, contractor,
subcontractor, or builder is also a retailer holding a retail
sales or use tax permit and transacting retail sales of
building materials, supplies, and equipment, the person shall
purchase such items of tangible personal property without
liability for the tax if such property will be subject to the
tax at the time of resale or at the time it is withdrawn from
inventory for construction purposes. The sales tax shall be
due in the reporting period when the materials, supplies,
and equipment are withdrawn from inventory for construction
purposes or when sold at retail. The tax shall not be due when
materials are withdrawn from inventory for use in construction
outside of Iowa and the tax shall not apply to tangible
personal property purchased and consumed by the manufacturer as
building materials in the performance by the manufacturer or
its subcontractor of construction outside of Iowa. The sale
of carpeting is not a sale of building materials. The sale of
carpeting to owners, contractors, subcontractors, or builders
shall be treated as the sale of ordinary tangible personal
property and subject to the tax imposed under this subsection
and the use tax.
Sec. 7. Section 423.3, subsection 39, paragraph a,
subparagraph (2), Code 2022, is amended to read as follows:
(2) The sale of all or substantially all of the tangible
personal property, or specified digital products, or services
held or used by a seller in the course of the seller’s trade
or business for which the seller is required to hold a sales
or use tax permit when the seller sells or otherwise transfers
the trade or business to another person who shall engage in a
similar trade or business.
-3-
LSB 5284SV (2) 89
jm/jh 3/ 27

S.F. 2367
Sec. 8. Section 423.3, subsection 80, paragraph d, Code
2022, is amended to read as follows:
d. Subject to the limitations in paragraph “c” , where the
owner, contractor, subcontractor, or builder is also a retailer
holding a retail sales or use tax permit and transacting
retail sales of building materials, supplies, and equipment,
the tax shall not be due when materials are withdrawn from
inventory for use in construction performed for a designated
exempt entity if an exemption certificate is received from such
entity.
Sec. 9. Section 423.5, subsection 2, Code 2022, is amended
to read as follows:
2. The excise tax is imposed upon every person using
the property within this state until the tax has been paid
directly to the county treasurer, the state department of
transportation, a retailer, or the department. This tax is
imposed on every person using the services or the product of
the services in this state until the user has paid the tax
either to an Iowa sales or use tax permit holder or to the
department.
Sec. 10. Section 423.14, subsection 2, paragraph b, Code
2022, is amended to read as follows:
b. The tax upon the use of all tangible personal property
and specified digital products other than that enumerated in
paragraph “a” , which is sold by a seller who is a retailer or
its agent that is not otherwise required to collect sales tax
under the provisions of this chapter , may be collected by the
retailer or agent and remitted to the department, pursuant to
the provisions of paragraph “e” , and sections 423.24 , 423.29 ,
423.30 , 423.32 423.31 , and 423.33 .
Sec. 11. Section 423.14A, subsection 3, paragraph c,
subparagraph (2), Code 2022, is amended to read as follows:
(2) A marketplace facilitator shall collect sales and
use tax on the entire sales price or purchase price paid by
a purchaser on each Iowa sale subject to sales and use tax
-4-
LSB 5284SV (2) 89
jm/jh 4/ 27

S.F. 2367
that is made or facilitated by the marketplace facilitator,
regardless of whether the marketplace seller for whom an Iowa
sale is made or facilitated has or is required to have a retail
sales or use tax permit or would have been required to collect
sales and use tax had the sale not been facilitated by the
marketplace facilitator, and regardless of the amount of the
sales price or purchase price that will ultimately accrue
to or benefit the marketplace facilitator, the marketplace
seller, or any other person. This sales and use tax collection
responsibility of a marketplace facilitator applies but shall
not be limited to sales facilitated through a computer software
application, commonly referred to as in-app purchases, or
through another specified digital product.
Sec. 12. Section 423.31, subsections 1, 3, 5, and 6, Code
2022, are amended to read as follows:
1. a. Each Except as provided in paragraph “b” , each person
subject to this section and section 423.36 and in accordance
with the provisions of this section and section 423.36 shall,
on or before the last day of the month following the close of
each calendar quarter month during which such person is or
has become or ceased being subject to the provisions of this
section and section 423.36 , make, sign, and file electronically
a return for the calendar quarter month in the form as may be
required. Returns shall show information relating to sales
prices including tangible personal property, specified digital
products, and services converted to the use of such person,
the amounts of sales prices excluded and exempt from the tax,
the amounts of sales prices subject to tax, a calculation of
tax due, and any other information for the period covered by
the return as may be required. Returns shall be signed by
the retailer or the retailer’s authorized agent and must be
certified by the retailer to be correct in accordance with
forms and rules prescribed by the director. A person required
to file a sales or use tax return who is unable to do so may
request permission from the director to file a return by
-5-
LSB 5284SV (2) 89
jm/jh 5/ 27

S.F. 2367
another method.
b. Notwithstanding paragraph “a” , each person subject to
this section who collects and remits less than one thousand
two hundred dollars in sales or use tax to the department per
calendar year may file a return on or before the last day of the
month following the close of the calendar year.
3. The sales tax forms prescribed by the director shall be
referred to as “retailers tax deposit”. Deposit forms shall
be signed by the retailer or the retailer’s duly authorized
agent, and shall be duly certified by the retailer or agent to
be correct. The director may authorize incorporated banks and
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 sales or use tax imposed
under this chapter , in the manner, at the times, and under
the conditions the director prescribes. The director shall
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.
5. a. Upon making application and receiving approval
from the director, a person and its affiliates that make
retail sales of tangible personal property, specified digital
products, or taxable enumerated services may make deposits and
file a consolidated sales or use tax return for the affiliated
group, pursuant to rules adopted by the director. A person and
each affiliate that files a consolidated return are jointly and
severally liable for all tax, penalty, and interest found due
for the tax period for which a consolidated return is filed or
required to be filed.
b. A business required to file a consolidated sales or use
tax return shall file a form entitled “schedule of consolidated
business locations” with its quarterly sales or use tax
return that shows the taxpayer’s consolidated permit number,
the permit number for each Iowa business location, the state
sales tax amount by business location, and the amount of state
-6-
LSB 5284SV (2) 89
jm/jh 6/ 27

S.F. 2367
sales tax due on goods consumed that are not assigned to a
specific business location. Consolidated quarterly sales or
use tax returns that are not accompanied by the schedule of
consolidated business locations form are considered incomplete
and are subject to penalty under section 421.27 .
6. If necessary or advisable in order to insure ensure
the payment of the tax, the director may require returns and
payment of the tax to be made for other than quarterly monthly
periods, the provisions of this section or other provision to
the contrary notwithstanding.
Sec. 13. Section 423.31, subsection 2, Code 2022, is amended
by striking the subsection.
Sec. 14. Section 423.33, subsection 1, paragraph a, Code
2022, is amended to read as follows:
a. If a purchaser fails to pay sales tax to the retailer
required to collect the tax, then in addition to all of the
rights, obligations, and remedies provided, a use tax is
payable by the purchaser directly to the department, and
sections 423.31 , 423.32 , 423.37 , 423.38 , 423.39 , 423.40 ,
423.41 , and 423.42 apply to the purchaser.
Sec. 15. Section 423.33, subsection 3, Code 2022, is amended
to read as follows:
3. Event sponsor’s liability for sales tax. A person
sponsoring a flea market or a craft, antique, coin, or stamp
show or similar event shall obtain from every retailer selling
tangible personal property, specified digital products, or
taxable services at the event proof that the retailer possesses
a valid sales or use tax permit or secure from the retailer
a statement, taken in good faith, that tangible personal
property, specified digital products, or services offered for
sale are not subject to sales tax. Failure to do so renders
a sponsor of the event liable for payment of any sales tax,
interest, and penalty due and owing from any retailer selling
property or services at the event. Sections 423.31 , 423.32 ,
423.37 , 423.38 , 423.39 , 423.40 , 423.41 , and 423.42 apply to the
-7-
LSB 5284SV (2) 89
jm/jh 7/ 27

S.F. 2367
sponsors. For purposes of this subsection , a “person sponsoring
a flea market or a craft, antique, coin, or stamp show or similar
event” does not include a marketplace facilitator as defined in
section 423.14A, subsection 1, an organization which sponsors
an event determined to qualify as an event involving casual
sales pursuant to section 423.3, subsection 39 , or the state
fair or a fair as defined in section 174.1 .
Sec. 16. Section 423.34, Code 2022, is amended to read as
follows:
423.34 Liability of user.
Any person who uses any tangible personal property,
specified digital products, or services enumerated in section
423.2 upon which the use tax has not been paid, either to the
county treasurer or to a retailer or direct to the department
as required by this subchapter , shall be liable for the payment
of tax, and shall on or before the last day of the month next
succeeding each quarterly monthly period pay the use tax upon
all tangible personal property, specified digital products,
or services used by the person during the preceding quarterly
monthly period in the manner and accompanied by such returns
as the director shall prescribe. All of the provisions of
sections 423.32 423.31 and 423.33 with reference to the returns
and payments shall be applicable to the returns and payments
required by this section .
Sec. 17. Section 423.36, subsection 4, paragraph b, Code
2022, is amended to read as follows:
b. If an applicant is making sales outside Iowa for use in
this state or furnishing services outside Iowa, the product
or result of which will be used in this state, that applicant
shall be issued one sales or use tax permit by the department
applicable to these out-of-state sales or services.
Sec. 18. Section 423.36, subsection 4, Code 2022, is amended
by adding the following new paragraph:
NEW PARAGRAPH . c. If an applicant is required to collect
sales or use tax and is not included in the definition of a
-8-
LSB 5284SV (2) 89
jm/jh 8/ 27

S.F. 2367
retailer maintaining a place of business in this state in
section 423.1, subsection 48, paragraph “a” , subparagraph (1),
the applicant shall be issued one sales or use tax permit by
the department regardless of the number of locations from which
sales are made.
Sec. 19. Section 423.36, subsections 7 and 8, Code 2022, are
amended to read as follows:
7. a. Sellers who are not regularly engaged in selling
at retail and do not have a permanent place of business, but
who are temporarily engaged in selling from trucks, portable
roadside stands, concessionaires at state, county, district,
or local fairs, carnivals, or the like, shall report and remit
the sales tax on a temporary seasonal basis, under rules
the director shall provide for the efficient collection of
the sales tax. This subsection applies to sellers who are
temporarily engaged in furnishing services.
b. Persons engaged in selling tangible personal property,
specified digital products, or furnishing services shall not
be required to obtain or retain a sales or use tax permit for a
place of business at which taxable sales of tangible personal
property, specified digital products, or taxable performance of
services will not occur.
8. The provisions of subsection 1 , dealing with the lawful
right of a retailer to transact business, as applicable, apply
to persons having receipts from furnishing services enumerated
in section 423.2 , except that a person holding a permit
pursuant to subsection 1 shall not be required to obtain any
separate sales or use tax permit for the purpose of engaging in
business involving the services.
Sec. 20. Section 423.40, subsections 1, 2, 3, and 5, Code
2022, are amended to read as follows:
1. In addition to the sales or use tax or additional sales
or use tax, the taxpayer shall pay a penalty as provided in
section 421.27 . The taxpayer shall also pay interest on the
sales or use tax or additional sales or use tax at the rate
-9-
LSB 5284SV (2) 89
jm/jh 9/ 27

S.F. 2367
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 or monthly tax deposit form or return was
required to be filed. The penalty and interest shall be paid
to the department and disposed of in the same manner as other
receipts under this subchapter . Unpaid penalties and interest
may be enforced in the same manner as the taxes imposed by this
chapter .
2. a. Any person who knowingly sells tangible personal
property, specified digital products, tickets or admissions
to places of amusement and athletic events, or gas, water,
electricity, or communication service at retail, or engages in
the furnishing of services enumerated in section 423.2 , in this
state without procuring a permit to collect tax, as provided
in section 423.36 , or who violates section 423.24 and the
officers of any corporation who so act are guilty of a serious
misdemeanor.
b. A person who knowingly sells tangible personal property,
specified digital products, tickets or admissions to places of
amusement and athletic events, or gas, water, electricity, or
communication service at retail, or engages in the furnishing
of services enumerated in section 423.2 , in this state after
the person’s sales or use tax permit has been revoked and
before it has been restored as provided in section 423.36,
subsection 6 , and the officers of any corporation who so act
are guilty of an aggravated misdemeanor.
3. A person who willfully attempts in any manner to evade
any tax imposed by this chapter or the payment of the tax or
a person who makes or causes to be made a false or fraudulent
semimonthly or monthly tax deposit form or return with intent
to evade any tax imposed by subchapter II or III or the payment
of the tax is guilty of a class “D” felony.
5. A person required to pay sales or use tax, or to make,
sign, or file a tax deposit form or return or supplemental
return, who willfully makes a false or fraudulent tax deposit
-10-
LSB 5284SV (2) 89
jm/jh 10/ 27

S.F. 2367
form or return, or willfully fails to pay at least ninety
percent of the tax or willfully fails to make, sign, or file
the tax deposit form or return, at the time required by law, is
guilty of a fraudulent practice.
Sec. 21. Section 423.45, subsection 4, paragraph b, Code
2022, is amended to read as follows:
b. The sales tax liability for all sales of tangible
personal property and specified digital products and all sales
of services is upon the seller and the purchaser unless the
seller takes from the purchaser a valid exemption certificate
stating under penalty of perjury that the purchase is for a
nontaxable purpose and is not a retail sale as defined in
section 423.1 , or the seller is not obligated to collect tax
due, or unless the seller takes a fuel exemption certificate
pursuant to subsection 5 . If the tangible personal property,
specified digital products, or services are purchased tax free
pursuant to a valid exemption certificate and the tangible
personal property, specified digital products, or services are
used or disposed of by the purchaser in a nonexempt manner, the
purchaser is solely liable for the taxes and shall remit the
taxes directly to the department and sections 423.31 , 423.32 ,
423.37 , 423.38 , 423.39 , 423.40 , 423.41 , and 423.42 shall apply
to the purchaser.
Sec. 22. Section 423.45, subsection 5, paragraph c, Code
2022, is amended to read as follows:
c. The seller may accept a completed fuel exemption
certificate, as prepared by the purchaser, for three
years unless the purchaser files a new completed exemption
certificate. If the fuel is purchased tax free pursuant to a
fuel exemption certificate which is taken by the seller, and
the fuel is used or disposed of by the purchaser in a nonexempt
manner, the purchaser is solely liable for the taxes, and shall
remit the taxes directly to the department and sections 423.31 ,
423.32 , 423.37 , 423.38 , 423.39 , 423.40 , 423.41 , and 423.42
shall apply to the purchaser.
-11-
LSB 5284SV (2) 89
jm/jh 11/ 27

S.F. 2367
Sec. 23. Section 423.50, subsection 1, Code 2022, is amended
to read as follows:
1. Only one remittance of tax per return is required except
as provided in this subsection . Sellers that collect more
than thirty thousand dollars in sales and use taxes for this
state during the preceding calendar year shall be required to
make additional remittances as required under rules adopted by
the director. The filing of a return is not required with an
additional remittance.
Sec. 24. Section 423.57, Code 2022, is amended to read as
follows:
423.57 Statutes applicable.
The director shall administer this subchapter as it relates
to the taxes imposed in this chapter in the same manner and
subject to all the provisions of, and all of the powers,
duties, authority, and restrictions contained in sections
423.14 , 423.14A , 423.14B , 423.15 , 423.16 , 423.17 , 423.19 ,
423.20 , 423.21 , 423.22 , 423.23 , 423.24 , 423.25 , 423.29 , 423.31 ,
423.32 , 423.33 , 423.34 , 423.34A , 423.35 , 423.37 , 423.38 ,
423.39 , 423.40 , 423.41 , and 423.42 , section 423.43, subsection
1 , and sections 423.45 , 423.46 , and 423.47 .
Sec. 25. Section 423.58, Code 2022, is amended to read as
follows:
423.58 Collection, permit, and tax return exemption for
certain out-of-state businesses.
Notwithstanding sections 423.14 , 423.14A , 423.14B , 423.29 ,
423.31 , 423.32 , and 423.36 , a person meeting the requirements
of section 29C.24 is not required to obtain a sales or use tax
permit, collect and remit sales and use tax, or make and file
applicable sales or use tax returns, as provided in section
29C.24, subsection 3 , paragraph “a” , subparagraph (2).
Sec. 26. Section 423A.6, subsection 4, Code 2022, is amended
to read as follows:
4. Section 422.25, subsection 4 , sections 422.30 , 422.67 ,
and 422.68 , section 422.69, subsection 1 , sections 422.70 ,
-12-
LSB 5284SV (2) 89
jm/jh 12/ 27

S.F. 2367
422.71 , 422.72 , 422.74 , and 422.75 , section 423.14, subsection
1 , and sections 423.23 , 423.24 , 423.25 , 423.31 , 423.33 ,
423.35 , 423.37 through 423.42 , and 423.47 , consistent with the
provisions of this chapter , apply with respect to the taxes
authorized under this chapter , in the same manner and with the
same effect as if the state and local hotel and motel taxes
were retail sales taxes within the meaning of those statutes.
Notwithstanding this subsection , the director shall provide
for quarterly monthly filing of returns and for other than
quarterly monthly filing of returns both as prescribed in
section 423.31 . The director may require all persons who are
engaged in the business of deriving any sales price subject
to tax under this chapter to register with the department.
All taxes collected under this chapter by a retailer, lodging
provider, lodging facilitator, lodging platform, or any other
person are deemed to be held in trust for the state of Iowa and
the local jurisdictions imposing the taxes.
Sec. 27. Section 423B.5, subsection 3, Code 2022, is amended
to read as follows:
3. A tax permit other than the state sales or use tax permit
required under section 423.36 shall not be required by local
authorities.
Sec. 28. Section 423B.6, subsection 2, paragraph c, Code
2022, is amended to read as follows:
c. Frequency of deposits and quarterly monthly reports of a
local sales and services tax with the department of revenue are
governed by the tax provisions in section 423.31 . Local tax
collections shall not be included in computation of the total
tax to determine frequency of filing under section 423.31 .
Sec. 29. Section 423C.4, Code 2022, is amended to read as
follows:
423C.4 Administration and enforcement.
All powers and requirements of the director of revenue
to administer the state sales tax law under chapter 423 are
applicable to the administration of the tax imposed under
-13-
LSB 5284SV (2) 89
jm/jh 13/ 27

S.F. 2367
section 423C.3 , including but not limited to section 422.25,
subsection 4 , sections 422.30 , 422.67 , and 422.68 , section
422.69, subsection 1 , sections 422.70 through 422.75 , section
423.14, subsection 1 , and sections 423.15 , 423.23 , 423.24 ,
423.25 , 423.31 , 423.33 , 423.35 and 423.37 through 423.42 ,
423.45 , 423.46 , and 423.47 . However, as an exception to the
powers specified in section 423.31 , the director shall only
require the filing of quarterly monthly reports.
Sec. 30. Section 423D.4, subsection 3, Code 2022, is amended
to read as follows:
3. Section 422.25, subsection 4 , sections 422.30 , 422.67 ,
and 422.68 , section 422.69, subsection 1 , sections 422.70 ,
422.71 , 422.72 , 422.74 , and 422.75 , section 423.14, subsection
1 , and sections 423.23 , 423.24 , 423.25 , 423.31 through
423.35 , 423.37 through 423.42 , and 423.47 , consistent with
the provisions of this chapter , apply with respect to the tax
authorized under this chapter , in the same manner and with the
same effect as if the excise taxes on equipment sales or use
were retail sales taxes within the meaning of those statutes.
Notwithstanding this subsection , the director shall provide
for quarterly monthly filing of returns and for other than
quarterly monthly filing of returns both as prescribed in
section 423.31 . All taxes collected under this chapter by a
retailer or any user are deemed to be held in trust for the
state of Iowa.
Sec. 31. Section 423G.5, subsection 3, Code 2022, is amended
to read as follows:
3. Section 422.25, subsection 4 , sections 422.30 , 422.67 ,
and 422.68 , section 422.69, subsection 1 , sections 422.70 ,
422.71 , 422.72 , 422.74 , and 422.75 , section 423.14, subsection
1 , and sections 423.23 , 423.24 , 423.25 , 423.31 through
423.35 , 423.37 through 423.42 , and 423.47 , consistent with the
provisions of this chapter , shall apply with respect to the tax
authorized under this chapter , in the same manner and with the
same effect as if the excise taxes on the sale or furnishing of
-14-
LSB 5284SV (2) 89
jm/jh 14/ 27

S.F. 2367
a water service were retail sales taxes within the meaning of
those statutes. Notwithstanding this subsection , the director
shall provide for quarterly monthly filing of returns and
for other than quarterly monthly filing of returns both as
prescribed in section 423.31 . All taxes collected under this
chapter by a retailer or any user are deemed to be held in trust
for the state of Iowa.
Sec. 32. Section 728.1, subsection 6, Code 2022, is amended
to read as follows:
6. “Place of business” means the premises of a business
required to obtain a sales or use tax permit pursuant to
chapter 423 , the premises of a nonprofit or not-for-profit
organization, and the premises of an establishment which is
open to the public at large or where entrance is limited by a
cover charge or membership requirement.
Sec. 33. Section 728.5, subsection 1, unnumbered paragraph
1, Code 2022, is amended to read as follows:
An owner, manager, or person who exercises direct control
over a place of business required to obtain a sales or use tax
permit shall be guilty of a serious misdemeanor under any of
the following circumstances:
Sec. 34. REPEAL. Section 423.32, Code 2022, is repealed.
Sec. 35. IMPLEMENTATION —— EMERGENCY RULES. The department
of revenue may adopt emergency rules under section 17A.4,
subsection 3, and section 17A.5, subsection 2, paragraph “b”,
to implement the provisions of this division of this Act and
the rules shall be effective immediately upon filing unless
a later date is specified in the rules. Any rules adopted
in accordance with this section shall also be published as a
notice of intended action as provided in section 17A.4.
Sec. 36. EFFECTIVE DATE. The following, being deemed of
immediate importance, takes effect upon enactment:
The section of this division of this Act enacting emergency
rules relating to the implementation of this division of this
Act.
-15-
LSB 5284SV (2) 89
jm/jh 15/ 27

S.F. 2367
DIVISION II
DISTRIBUTIONS OF REVENUE TO LOCAL GOVERNMENTS AND SCHOOL
DISTRICTS
Sec. 37. Section 423B.7, subsection 2, paragraph a, Code
2022, is amended to read as follows:
a. The director of revenue by August 15 of each fiscal
year the last day of each month shall send transfer to each
city or county where the local option tax is imposed , an
estimate of the amount of tax moneys remitted to the department
attributable to each city or county will receive for the year
and for each month of the year from the preceding month . At the
end of each month, the director may revise the estimates for
the year and remaining months.
Sec. 38. Section 423B.7, subsection 2, paragraphs b and c,
Code 2022, are amended by striking the paragraphs.
Sec. 39. Section 423F.2, subsection 4, paragraph a, Code
2022, is amended to read as follows:
a. The director of revenue by August 15 of each fiscal year
the last day of each month shall send transfer to each school
district an estimate of the amount of tax moneys remitted
to the department attributable to each school district will
receive for the year and for each month of the year from the
preceding month . At the end of each month, the director may
revise the estimates for the year and remaining months.
Sec. 40. Section 423F.2, subsection 4, paragraph b, Code
2022, is amended by striking the paragraph and inserting in
lieu thereof the following:
b. On or before August 15 of each fiscal year the director
of revenue shall provide to each school district an estimate
of the amount of tax moneys to be distributed to each school
district for the current fiscal year.
Sec. 41. Section 423F.2, subsection 4, paragraph c, Code
2022, is amended by striking the paragraph.
Sec. 42. TRANSITION PROVISION FOR LOCAL OPTION SALES TAX
AND SECURING AN ADVANCED VISION FOR EDUCATION —— TRANSFER
-16-
LSB 5284SV (2) 89
jm/jh 16/ 27

S.F. 2367
AMOUNTS. Notwithstanding any other provision of law to the
contrary, the department of revenue shall estimate monthly
local option sales tax and securing an advanced vision for
education transfer amounts through the end of the 2022 calendar
year. The department of revenue shall transfer estimated
amounts to each local government or school district for the
months of July, August, and September 2022. Beginning with the
October 2022 transfer, the department shall not use estimated
amounts and shall transfer the amount of tax attributable to
each local government or school district for the tax remitted
in September 2022. Any adjustment amount that is necessary to
the July, August, or September 2022 estimated transfer amount
to reflect the accurate attributable amount shall be made by
the department of revenue or the local government or school
district by the close of business on December 30, 2022.
DIVISION III
LIABILITY OF SELLERS USING CERTIFIED SERVICE PROVIDER
Sec. 43. Section 423.48, subsection 3, paragraph a, Code
2022, is amended to read as follows:
a. A model 1 seller’s obligation to calculate, collect, and
remit sales and use taxes shall be performed by its certified
service provider, except for the seller’s obligation to remit
tax on its own purchases. As the seller’s agent, the certified
service provider is liable for its model 1 seller’s sales
and use tax due Iowa on all sales transactions it processes
for the seller except as set out in this section . A seller
that contracts with a certified service provider is not
liable to the state for sales or use tax due on transactions
processed by the certified service provider unless the seller
misrepresents the types of items or services it sells or
commits fraud certified service provider establishes that
the certified service provider is not liable in accordance
with the agreement . In the absence of probable cause to
believe that the seller has committed fraud or made a material
misrepresentation liability relief established by the certified
-17-
LSB 5284SV (2) 89
jm/jh 17/ 27

S.F. 2367
service provider , the seller is not subject to audit on the
transactions processed by the certified service provider.
A model 1 seller is subject to audit for transactions not
processed by the certified service provider. The director is
authorized to perform a system check of the model 1 seller and
review the seller’s procedures to determine if the certified
service provider’s system is functioning properly and the
extent to which the seller’s transactions are being processed
by the certified service provider.
DIVISION IV
AUTHORITY TO CANCEL VARIOUS PERMITS ISSUED BY THE DEPARTMENT
Sec. 44. Section 421.17, Code 2022, is amended by adding the
following new subsection:
NEW SUBSECTION . 37. Notwithstanding any other provision
of law to the contrary, to cancel the following permits upon
verification by the department of revenue the permits are no
longer in use: income tax withholding, sales or use tax, or
motor fuel tax.
DIVISION V
ECONOMIC DEVELOPMENT AUTHORITY SALES AND USE TAX REFUND
INCENTIVES
Sec. 45. Section 15.331A, subsection 2, Code 2022, is
amended to read as follows:
2. To receive the refund, a claim shall be filed by the
eligible business with the department of revenue as follows:
a. The contractor or subcontractor shall state under oath,
on forms provided by the department of revenue, the amount of
the sales of tangible personal property or services rendered,
furnished, or performed including water, sewer, gas, and
electric utility services upon which sales or use tax has been
paid prior to the project contract completion, and shall file
the forms with the eligible business before final settlement
is made.
b. The eligible business shall, not more than one year after
project contract completion, make application to the department
-18-
LSB 5284SV (2) 89
jm/jh 18/ 27

S.F. 2367
of revenue for any refund of the amount of the sales and use
taxes paid pursuant to chapter 423 upon any tangible personal
property, or services rendered, furnished, or performed,
including water, sewer, gas, and electric utility services.
The application shall be made in the manner and upon forms to
be provided by the department of revenue, and the department of
revenue shall audit the claim and, if approved, issue a warrant
to the eligible business in the amount of the sales or use tax
which has been paid to the state of Iowa under a contract. The
application must be made within one year after the project
completion date. A claim filed by the eligible business in
accordance with this section shall not be denied by reason of a
limitation provision set forth in chapter 421 or 423 .
c. The eligible business shall inform the department of
revenue in writing after project contract completion. For
purposes of this section , “project completion” means the
first date upon which the average annualized production of
finished product for the preceding ninety-day period at the
manufacturing facility operated by the eligible business is
at least fifty percent of the initial design capacity of the
facility.
Sec. 46. Section 15.331A, Code 2022, is amended by adding
the following new subsection:
NEW SUBSECTION . 4. For purposes of this section, “contract
completion” means the date of completion of a written contract
relating to the construction or equipping of the facility that
is part of the project of the eligible business.
Sec. 47. Section 15.331C, subsections 1 and 2, Code 2022,
are amended to read as follows:
1. An In lieu of the sales and use tax refund provided
in section 15.331A, an eligible business may claim a tax
credit in an amount equal to the sales and use taxes paid by a
third-party developer under chapter 423 for gas, electricity,
water, or sewer utility services, goods, wares, or merchandise,
or on services rendered, furnished, or performed to or for a
-19-
LSB 5284SV (2) 89
jm/jh 19/ 27

S.F. 2367
contractor or subcontractor and used in the fulfillment of a
written contract relating to the construction or equipping of
a facility of the eligible business. Taxes attributable to
intangible property and furniture and furnishings shall not
be included, but taxes attributable to racks, shelving, and
conveyor equipment to be used in a warehouse or distribution
center shall be included. Any credit in excess of the tax
liability for the tax year may be credited to the tax liability
for the following seven years or until depleted, whichever
occurs earlier. An eligible business may elect to receive a
refund of all or a portion of an unused tax credit.
2. A third-party developer shall state under oath, on
forms provided by the department of revenue, the amount of
taxes paid as described in subsection 1 and shall submit such
forms to the department of revenue. The taxes paid shall be
itemized to allow identification of the taxes attributable
to racks, shelving, and conveyor equipment to be used in a
warehouse or distribution center. The eligible business
shall make application to the department of revenue in the
manner and form prescribed by the department of revenue, and
within the time for applying for a sales and use tax refund
under section 15.331A. After timely receiving the form from
the third-party developer and application from the eligible
business , the department of revenue shall audit the claim
and, if approved, shall issue a tax credit certificate to the
eligible business equal to the sales and use taxes paid by a
third-party developer under chapter 423 for gas, electricity,
water, or sewer utility services, goods, wares, or merchandise,
or on services rendered, furnished, or performed to or for a
contractor or subcontractor and used in the fulfillment of a
written contract relating to the construction or equipping
of a facility. The department of revenue shall also issue a
tax credit certificate to the eligible business equal to the
taxes paid and attributable to racks, shelving, and conveyor
equipment to be used in a warehouse or distribution center.
-20-
LSB 5284SV (2) 89
jm/jh 20/ 27

S.F. 2367
The aggregate combined total amount of tax refunds under
section 15.331A for taxes paid and attributable to racks,
shelving, and conveyor equipment to be used in a warehouse or
distribution center and of tax credit certificates issued by
the department of revenue under this section for the taxes paid
and attributable to racks, shelving, and conveyor equipment
to be used in a warehouse or distribution center shall not
exceed five hundred thousand dollars in a fiscal year. If
an applicant for a tax credit certificate does not receive
a refund or certificate for the taxes paid and attributable
to racks, shelving, and conveyor equipment to be used in a
warehouse or distribution center, the application shall be
considered in succeeding fiscal years. The eligible business
shall not claim a tax credit under this section unless a tax
credit certificate issued by the department of revenue is
included with the taxpayer’s tax return for the tax year for
which the tax credit is claimed. A tax credit certificate
shall contain the eligible business’s name, address, tax
identification number, the amount of the tax credit, and other
information deemed necessary by the department of revenue.
Sec. 48. Section 15.355, subsection 2, Code 2022, is amended
by striking the subsection and inserting in lieu thereof the
following:
2. a. A housing business may claim a refund of the sales
and use taxes paid under chapter 423 prior to the completion
of the housing project that are directly related to a housing
project and specified in the agreement.
b. To receive a refund, a claim shall be filed by the
housing business with the department of revenue as follows:
(1) The contractor or subcontractor shall state under oath,
on forms provided by the department of revenue, the amount
of sales and use taxes paid under chapter 423 prior to the
completion of the housing project that are directly related to
a housing project and specified in the agreement.
(2) The contractor or subcontractor shall file the forms
-21-
LSB 5284SV (2) 89
jm/jh 21/ 27

S.F. 2367
with the housing business before final settlement is made.
(3) (a) The housing business shall, after the agreement
completion date, make application to the department of revenue
for any refund of the amount of sales and use taxes paid under
chapter 423 prior to the completion of the housing project that
were directly related to a housing project and specified in the
agreement. The application shall be made in the manner and
upon forms to be provided by the department of revenue. The
department of revenue shall audit the claim and, if approved,
issue a warrant to the housing business. The application
must be made within one year after the agreement completion
date. A claim filed by the housing business in accordance with
this subsection shall not be denied by reason of a limitation
provision set forth in chapter 421 or 423.
(b) For purposes of this subparagraph, “agreement completion
date” means the date on which the authority notifies the
department of revenue that all applicable requirements of the
agreement entered into pursuant to section 15.354, subsection
3, paragraph “a” , and all applicable requirements of this part,
including the rules the authority and the department of revenue
adopt pursuant to section 15.356, are satisfied.
c. A contractor or subcontractor who willfully makes a
false claim under oath in violation of the provisions of this
subsection shall be guilty of a simple misdemeanor and in
addition to any other penalty, the contractor or subcontractor
shall be liable for the payment of the tax and any applicable
penalty and interest.
Sec. 49. EFFECTIVE DATE. This division of this Act, being
deemed of immediate importance, takes effect upon enactment.
Sec. 50. APPLICABILITY. This division of this Act applies
to claims for refunds filed on or after the effective date of
this division of this Act.
DIVISION VI
MOTOR FUEL REPORTING REQUIREMENT —— PENALTY
Sec. 51. Section 452A.33, subsection 1, paragraph c, Code
-22-
LSB 5284SV (2) 89
jm/jh 22/ 27

S.F. 2367
2022, is amended to read as follows:
c. (1) The retail dealer shall prepare and submit file
the report with the department in a manner and according to
procedures required by the department in compliance with
section 452A.61 . However, the department may require that the
retail dealer file the report with the department by electronic
transmission. The department may require that retail dealers
report to the department on an annual, quarterly, or monthly
basis. The department, upon application by a retail dealer,
may grant a reasonable extension of time to file the report.
(2) If a retail dealer fails to file the report as required
by this section or fails to maintain records required to file
the report the department may impose a civil penalty of not
more than one hundred dollars per occurrence in addition to any
other penalty provided by law. The penalty amount shall be
deposited into the general fund of the state.
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 sales, use, and motor vehicle fuel
taxes administered by the department of revenue including
distributions to local governments and school districts, the
liability of sellers, tax refund and tax credit incentives, and
motor fuel tax reporting modifications.
DIVISION I —— SALES, USE, AND EXCISE TAX —— RETURNS DUE. The
bill allows a taxpayer to have a combined sales and use tax
permit and to file a combined return for sales and use taxes.
Currently, a taxpayer must possess a separate sales and use tax
permit and file separate sales and use tax returns.
The bill changes numerous references to the phrase “sales
tax permit” in the Code to the phrase “sales or use tax
permit”.
Currently, a person is required to file a sales or use tax
return on a quarterly basis. The bill changes this filing
requirement from a quarterly basis to a monthly basis. The
-23-
LSB 5284SV (2) 89
jm/jh 23/ 27

S.F. 2367
bill does allow a person required to file a sales or use tax
return and who collects less than $1,200 in sales or use tax in
a calendar year, to file a return once a year on or before the
last day of the month following the close of the calendar year.
The bill allows certain persons required to collect sales
or use tax who do not meet the definition of a “retailer
maintaining a business in this state” in Code section
423.1(48)(a)(1), to be issued only one sales or use tax permit.
The bill allows the director of revenue, if necessary, to
ensure the payment of sales or use tax, to require a sales or
use tax return be filed on a different basis other than on a
monthly basis.
The bill strikes a provision allowing a person required to
file a sales or use tax return to take a credit against the
total quarterly amount of tax due, upon a proper showing of
necessity, allowing for the balance of tax due to be paid up to
30 days after the return was due.
The bill strikes a provision requiring a seller, who
collects more than $30,000 of sales or use tax in the preceding
calendar year, to make additional remittances to the state
under the rules adopted by the director of revenue.
The bill allows the department of revenue to adopt emergency
rules to implement the division. The emergency rules provision
takes effect upon enactment.
DIVISION II —— DISTRIBUTIONS OF REVENUE TO LOCAL GOVERNMENTS
AND SCHOOL DISTRICTS. Currently, by August 15, the department
of revenue estimates the local option sale tax (LOST) and
securing an advanced vision for education (SAVE) tax amounts
that will be transferred to each local government or school
district on a fiscal year and monthly basis. The transfer
estimates may be revised for the year and remaining months by
the director of revenue if the estimates are incorrect.
Commencing with the fiscal year beginning July 1, 2022, the
bill changes the LOST and SAVE transfer amount procedures, by
requiring the department of revenue to transfer the actual
-24-
LSB 5284SV (2) 89
jm/jh 24/ 27

S.F. 2367
LOST and SAVE taxes collected that are attributable to each
local government or school district to that local government
or school district.
The bill also creates a transition procedure for the LOST
and SAVE tax amounts transferred during July and August 2022.
Under the transition procedure, the department of revenue shall
transfer estimated amounts of LOST and SAVE to each local
government or school district for the months of July, August,
and September 2022. However, beginning with the October 2022
transfer, the department of revenue shall transfer the actual
amount of tax attributable to each local government or school
district for the LOST and SAVE tax remitted in September 2022.
The bill requires any adjustment amount that is necessary to
the July, August, or September 2022 estimated transfer amounts
be made by the close of business on December 30, 2022.
DIVISION III —— LIABILITY OF SELLERS USING CERTIFIED
SERVICE PROVIDER. The bill specifies that a seller of personal
property or services who contracts with a certified service
provider is not liable to the state for sales or use tax due on
transactions processed by the certified service provider unless
the certified service provider establishes it is not liable
in accordance with the agreement with the seller. The bill
specifies that if the certified service provider is liable for
the sales or use tax due, the seller is not subject to audit
on transactions processed by the certified service provider.
“Certified service provider” is defined in Code section 423.1
to mean an agent certified under the agreement to perform
all of a seller’s sales or use tax functions, other than the
seller’s obligation to remit tax on its own purchases.
DIVISION IV —— AUTHORITY TO CANCEL VARIOUS PERMITS ISSUED
BY THE DEPARTMENT. The bill allows the director of the
department of revenue to cancel the following tax permits if
the department determines the permits are no longer in use:
income tax withholding, sales or use tax, or motor fuel tax.
DIVISION V —— ECONOMIC DEVELOPMENT AUTHORITY SALES AND USE
-25-
LSB 5284SV (2) 89
jm/jh 25/ 27

S.F. 2367
TAX REFUND INCENTIVES. Currently, for certain sales or use
tax refund incentives in Code section 15.331A administered
by the department of economic development authority, an
eligible business must apply for a sales or use tax refund for
items purchased prior to the “project” completion date. The
bill changes the refund procedures by requiring an eligible
business to apply for such sales or use tax refunds for items
purchased prior to the completion of the “contract” rather than
completion of the “project”. The bill also requires such an
application be made within one year of the project completion
date, and that the department of revenue be informed in writing
after the contract completion. The bill defines “contract
completion” as the date of completion of a written contract
relating to the construction or equipping of the facility that
is part of the project of the eligible business.
For the third-party developer tax credit in Code section
15.331C relating to a tax credit for sales and use taxes paid
by a third-party developer, the bill specifies that this credit
is in lieu of the sales and use tax refund tax incentive
provided in Code section 15.331A. The bill also provides
that the eligible business shall make an application to the
department of revenue within one year of the project completion
date, and that the department be informed in writing after
the contract completion. The bill requires the department
of revenue to audit any third-party developer tax credit
claim, prior to issuing a third-party developer tax credit
certificate.
The bill makes changes to the procedures for workforce
housing tax incentives in Code section 15.355. The bill
permits a housing business to claim a refund of the sales
and use taxes paid prior to the completion of the housing
project that are directly related to the housing project and
specified in an agreement. In order to receive the sales and
use tax refund, the bill requires a contractor or subcontractor
working on the housing project to submit a form under oath
-26-
LSB 5284SV (2) 89
jm/jh 26/ 27

S.F. 2367
stating the amount of sales and use taxes paid prior to the
housing project. The bill makes it a simple misdemeanor if a
contractor or subcontractor willfully makes a false claim under
oath in relating to the workforce sales and use tax refund.
The bill then requires, after the agreement completion date,
the housing business to make an application to the department
of revenue for any sales and use tax refund. The bill defines
“agreement completion date” to mean the date the economic
development authority notifies the department of revenue that
all applicable requirements of the agreement have been met.
The bill also requires the department of revenue to audit the
claim prior to issuing the sales and use tax refund.
This division takes effect upon enactment and applies to
claims for refunds filed on or after the effective date of the
bill.
DIVISION VI —— MOTOR FUEL REPORTING REQUIREMENT —— PENALTY.
The bill specifies that each motor fuel retail dealer shall
file a report with the department of revenue detailing their
total motor fuel gallonage within a reporting period in the
manner required by the department and in compliance within
the time frames established in Code section 452A.61. The
bill permits the department of revenue to require a retail
dealer to file such a report with the department by electronic
transmission. The bill allows the department of revenue to
impose a civil penalty on the retail dealer, not to exceed
$100, for each instance a retail dealer fails to timely file
a report or fails to maintain records required to file the
report.
-27-
LSB 5284SV (2) 89
jm/jh 27/ 27