Iowa-2013-SSB1117-Introduced

S.F. _____ Section 1. Section 423.2, subsection 1, unnumbered 1 paragraph 1, Code 2013, is amended to read as follows: 2 There is imposed a tax of six and three-eighths percent upon 3 the sales price of all sales of tangible personal property, 4 consisting of goods, wares, or merchandise, sold at retail in 5 the state to consumers or users except as otherwise provided 6 in this subchapter . 7 Sec. 2. Section 423.2, subsections 2 and 3, Code 2013, are 8 amended to read as follows: 9 2. A tax of six and three-eighths percent is imposed upon 10 the sales price of the sale or furnishing of gas, electricity, 11 water, heat, pay television service, and communication service, 12 including the sales price from such sales by any municipal 13 corporation or joint water utility furnishing gas, electricity, 14 water, heat, pay television service, and communication service 15 to the public in its proprietary capacity, except as otherwise 16 provided in this subchapter , when sold at retail in the state 17 to consumers or users. 18 3. A tax of six and three-eighths percent is imposed upon 19 the sales price of all sales of tickets or admissions to places 20 of amusement, fairs, and athletic events except those of 21 elementary and secondary educational institutions. A tax of 22 six and three-eighths percent is imposed on the sales price of 23 an entry fee or like charge imposed solely for the privilege of 24 participating in an activity at a place of amusement, fair, or 25 athletic event unless the sales price of tickets or admissions 26 charges for observing the same activity are taxable under this 27 subchapter . A tax of six and three-eighths percent is imposed 28 upon that part of private club membership fees or charges paid 29 for the privilege of participating in any athletic sports 30 provided club members. 31 Sec. 3. Section 423.2, subsection 4, paragraph a, Code 2013, 32 is amended to read as follows: 33 a. A tax of six and three-eighths percent is imposed upon 34 the sales price derived from the operation of all forms of 35 -1- LSB 1104XC (1) 85 da/sc 1/ 6

S.F. _____ amusement devices and games of skill, games of chance, raffles, 1 and bingo games as defined in chapter 99B , and card game 2 tournaments conducted under section 99B.7B , that are operated 3 or conducted within the state, the tax to be collected from 4 the operator in the same manner as for the collection of taxes 5 upon the sales price of tickets or admission as provided in 6 this section . Nothing in this subsection shall legalize any 7 games of skill or chance or slot-operated devices which are now 8 prohibited by law. 9 Sec. 4. Section 423.2, subsection 5, Code 2013, is amended 10 to read as follows: 11 5. There is imposed a tax of six and three-eighths percent 12 upon the sales price from the furnishing of services as defined 13 in section 423.1 . 14 Sec. 5. Section 423.2, subsection 7, paragraph a, 15 unnumbered paragraph 1, Code 2013, is amended to read as 16 follows: 17 A tax of six and three-eighths percent is imposed upon the 18 sales price from the sales, furnishing, or service of solid 19 waste collection and disposal service. 20 Sec. 6. Section 423.2, subsection 8, paragraph a, Code 2013, 21 is amended to read as follows: 22 a. A tax of six and three-eighths percent is imposed on 23 the sales price from sales of bundled transactions. For the 24 purposes of this subsection , a “bundled transaction” is the 25 retail sale of two or more distinct and identifiable products, 26 except real property and services to real property, which 27 are sold for one nonitemized price. A “bundled transaction” 28 does not include the sale of any products in which the sales 29 price varies, or is negotiable, based on the selection by the 30 purchaser of the products included in the transaction. 31 Sec. 7. Section 423.2, subsection 9, Code 2013, is amended 32 to read as follows: 33 9. A tax of six and three-eighths percent is imposed upon 34 the sales price from any mobile telecommunications service, 35 -2- LSB 1104XC (1) 85 da/sc 2/ 6

S.F. _____ including all paging services, that this state is allowed 1 to tax pursuant to the provisions of the federal Mobile 2 Telecommunications Sourcing Act, Pub. L. No. 106-252, 4 U.S.C. 3 § 116 et seq. For purposes of this subsection , taxes on mobile 4 telecommunications service, as defined under the federal Mobile 5 Telecommunications Sourcing Act that are deemed to be provided 6 by the customer’s home service provider, shall be paid to 7 the taxing jurisdiction whose territorial limits encompass 8 the customer’s place of primary use, regardless of where the 9 mobile telecommunications service originates, terminates, 10 or passes through and shall in all other respects be taxed 11 in conformity with the federal Mobile Telecommunications 12 Sourcing Act. All other provisions of the federal Mobile 13 Telecommunications Sourcing Act are adopted by the state of 14 Iowa and incorporated into this subsection by reference. With 15 respect to mobile telecommunications service under the federal 16 Mobile Telecommunications Sourcing Act, the director shall, if 17 requested, enter into agreements consistent with the provisions 18 of the federal Act. 19 Sec. 8. Section 423.2, subsection 11, paragraph b, 20 subparagraph (2), Code 2013, is amended to read as follows: 21 (2) Transfer from the remaining revenues the amounts 22 required under Article VII, section 10, of the Constitution 23 of the State of Iowa to the natural resources and outdoor 24 recreation trust fund created in section 461.31 , if applicable . 25 Sec. 9. Section 423.2, subsection 13, Code 2013, is amended 26 to read as follows: 27 13. The sales tax rate of six and three-eighths percent is 28 reduced to five and three-eighths percent on January 1, 2030. 29 Sec. 10. Section 423.5, unnumbered paragraph 1, Code 2013, 30 is amended to read as follows: 31 Except as provided in subsection 3 , an excise tax at the 32 rate of six and three-eighths percent of the purchase price or 33 installed purchase price is imposed on the following: 34 Sec. 11. Section 423.5, subsection 9, Code 2013, is amended 35 -3- LSB 1104XC (1) 85 da/sc 3/ 6

S.F. _____ to read as follows: 1 9. The use tax rate of six and three-eighths percent is 2 reduced to five and three-eighths percent on January 1, 2030. 3 Sec. 12. Section 423.43, subsection 1, paragraph b, Code 4 2013, is amended to read as follows: 5 b. Subsequent to the deposit into the general fund of the 6 state and after the transfer of such pursuant to paragraph “a” , 7 the department shall do the following in the order prescribed: 8 (1) Transfer the revenues collected under chapter 423B , the 9 department shall transfer . 10 (2) Transfer from the remaining revenues the amounts 11 required under Article VII, section 10, of the Constitution 12 of the State of Iowa to the natural resources and outdoor 13 recreation trust fund created in section 461.31. 14 (3) Transfer one-sixth of such remaining revenues to the 15 secure an advanced vision for education fund created in section 16 423F.2 . This paragraph subparagraph (3) is repealed December 17 31, 2029. 18 Sec. 13. PURPOSE. The purpose of this Act is to provide 19 for the implementation of Article VII, section 10, of the 20 Constitution of the State of Iowa by fully funding the natural 21 resources and outdoor recreation trust fund as created in 22 section 461.31, pursuant to Article VII, section 10, of the 23 Constitution of the State of Iowa. 24 Sec. 14. EMERGENCY RULES. The department of revenue shall 25 adopt emergency rules under section 17A.4, subsection 3, and 26 section 17A.5, subsection 2, paragraph “b”, to implement 27 the provisions of this Act. The rules shall be effective 28 immediately upon filing with the administrative rules 29 coordinator unless a later date is specified in the rules, but 30 not later than July 1, 2013. Any rules adopted in accordance 31 with this section shall also be published as a notice of 32 intended action as provided in section 17A.4. 33 Sec. 15. EFFECTIVE DATE. The following provision or 34 provisions of this Act take effect: 35 -4- LSB 1104XC (1) 85 da/sc 4/ 6

S.F. _____ 1. Except as provided in subsection 2, this Act takes effect 1 on July 1, 2013. 2 2. The section of this Act requiring the department of 3 revenue to adopt emergency rules, being deemed of immediate 4 importance, takes effect upon enactment. 5 EXPLANATION 6 This bill relates to the sales tax imposed on the sale of 7 tangible personal property and the furnishing of enumerated 8 services and to an amendment to the Constitution of the State 9 of Iowa ratified on November 2, 2010, dedicating a portion of 10 state revenue for purposes of benefiting natural resources, 11 outdoor recreation, and soil conservation (Article VII, 12 section 10). The amendment authorizes the general assembly to 13 implement its provisions. 14 The constitutional amendment creates a natural resources and 15 outdoor recreation trust fund (trust fund) within the state 16 treasury. The trust fund and allocations from the fund are 17 codified in Code chapter 461. Moneys in the trust fund cannot 18 be used for any purpose other than protecting and enhancing 19 water quality and natural areas in this state including 20 parks, trails, and fish and wildlife habitat, and conserving 21 agricultural soils in this state. No revenue is credited to 22 the trust fund until the sales tax rate is increased. Whenever 23 the rate is increased, the amount generated by the increase is 24 credited to the fund, but the amount credited cannot exceed the 25 amount that a rate of 3/8 of 1 percent would generate. 26 Currently, the tax on sales and services in Iowa is imposed 27 at the rate of 6 percent. The bill provides for an increase 28 in the rate to 6 and 3/8 percent, and the transfer of these 29 moneys into the trust fund. In 2012, the General Assembly 30 enacted S.F. 2329 (2012 Iowa Acts, ch. 1098) which provided for 31 the transfer of sales tax revenues deposited into the general 32 fund of the state (general fund) into the trust fund when 33 applicable. The bill provides for the same tax rate increase 34 to the use tax and transfer of those revenues from the general 35 -5- LSB 1104XC (1) 85 da/sc 5/ 6

S.F. _____ fund to the trust fund. 1 The bill does not affect the 5 percent rate imposed on 2 vehicles subject to the issuance of a certificate of title, 3 the use of manufactured housing, or the use of certain leased 4 vehicles. 5 The bill takes effect on July 1, 2013, except for a provision 6 requiring the department of revenue to adopt emergency rules, 7 which takes effect upon enactment. 8 -6- LSB 1104XC (1) 85 da/sc 6/ 6