Bill Text: IA HF2046 | 2017-2018 | 87th General Assembly | Introduced
Bill Title: A bill for an act relating to the collection of sales and use taxes by certain out-of-state retailers, and including effective date provisions.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2018-02-19 - Subcommittee: Vander Linden, Jacoby and Windschitl. H.J. 307. [HF2046 Detail]
Download: Iowa-2017-HF2046-Introduced.html
House File 2046 - Introduced HOUSE FILE BY JACOBY A BILL FOR 1 An Act relating to the collection of sales and use taxes by 2 certain out=of=state retailers, and including effective date 3 provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 5073YH (3) 87 mm/jh PAG LIN 1 1 Section 1. Section 423.1, subsection 48, paragraph a, Code 1 2 2018, is amended to read as follows: 1 3 a. "Retailer maintaining a place of business in this state" 1 4 or any like term includes any of the following: 1 5 (1) A retailer having or maintaining within this state, 1 6 directly or by a subsidiary, an office, distribution house, 1 7 sales house, warehouse, or other place of business, or any 1 8 representative operating within this state under the authority 1 9 of the retailer or its subsidiary, irrespective of whether that 1 10 place of business or representative is located here permanently 1 11 or temporarily, or whether the retailer or subsidiary is 1 12 admitted to do business within this state pursuant to chapter 1 13 490. 1 14 (2) A retailer who does not satisfy the requirements of 1 15 subparagraph (1) but who does satisfy either of the following 1 16 requirements in the previous calendar year or the current 1 17 calendar year: 1 18 (a) The retailer's gross revenue from the sale of tangible 1 19 personal property or services delivered into Iowa exceeds one 1 20 hundred thousand dollars. 1 21 (b) The retailer sells tangible personal property or 1 22 services for delivery into Iowa in two hundred or more separate 1 23 transactions. 1 24 Sec. 2. Section 423.1, subsection 48, paragraph b, 1 25 subparagraph (1), unnumbered paragraph 1, Code 2018, is amended 1 26 to read as follows: 1 27 A retailer shall be presumed to be maintaining a place of 1 28 business in this state, as defined infor purposes of paragraph 1 29 "a", subparagraph (1), if any person that has substantial nexus 1 30 in this state, other than a person acting in its capacity as a 1 31 common carrier, does any of the following: 1 32 Sec. 3. CONTINGENT EFFECTIVE DATE. 1 33 1. This Act takes effect on the later of July 1, 2018, 1 34 or the first day of the first calendar quarter following the 1 35 date that the United States supreme court issues an opinion 2 1 or that federal legislation takes effect which abrogates the 2 2 physical presence requirement of Quill v. North Dakota, 504 2 3 U.S. 298 (1992), or which otherwise confirms that a state 2 4 may constitutionally impose its sales or use tax upon an 2 5 out=of=state seller in circumstances similar to those enacted 2 6 in this Act. 2 7 2. The director of revenue shall notify the Code editor if 2 8 the contingency in subsection 1 occurs. 2 9 EXPLANATION 2 10 The inclusion of this explanation does not constitute agreement with 2 11 the explanation's substance by the members of the general assembly. 2 12 This bill relates to the collection of sales and use taxes 2 13 by certain out=of=state retailers. A retailer making taxable 2 14 sales in Iowa is required to collect sales tax. For sales made 2 15 outside Iowa but subject to the use tax, Iowa law requires 2 16 retailers maintaining a place of business in this state to 2 17 collect and remit the use tax. 2 18 Currently, as defined in Code section 423.1, the term 2 19 "retailer maintaining a place of business in this state" 2 20 includes retailers that have in Iowa certain physical places 2 21 of business or representatives operating under the authority 2 22 of the retailer, and includes a presumption that a retailer is 2 23 maintaining a place of business in Iowa when any person who has 2 24 substantial nexus in Iowa meets certain conditions or performs 2 25 certain acts associated with the retailer. 2 26 The bill amends the definition of "retailer maintaining 2 27 a place of business in this state" to also include retailers 2 28 who do not meet the requirements listed above, but who do have 2 29 gross revenue from the sale of tangible personal property 2 30 or services delivered into Iowa in excess of $100,000 for 2 31 the current or previous calendar year, or who sell tangible 2 32 personal property or services for delivery into Iowa in 200 or 2 33 more separate transactions in the current or previous calendar 2 34 year. 2 35 The bill takes effect on the later of July 1, 2018, or the 3 1 first day of the first quarter following the date that the 3 2 United States supreme court issues an opinion or that federal 3 3 legislation takes effect which abrogates the physical presence 3 4 requirement of Quill v. North Dakota, 504 U.S. 298 (1992), or 3 5 otherwise confirms that a state may constitutionally impose its 3 6 sales or use tax upon an out=of=state seller in circumstances 3 7 similar to those in the bill. In Quill, the United States 3 8 supreme court held it is a violation of the commerce clause 3 9 of the United States Constitution for a state to require an 3 10 out=of=state seller to collect a state's sales or use tax if 3 11 the seller does not have a physical presence in that state. 3 12 Because Congress has the power to regulate interstate commerce, 3 13 it has the power to modify or abrogate the holding of Quill 3 14 through legislation. 3 15 The bill requires the director of revenue to notify the Iowa 3 16 Code editor when the contingency is satisfied. LSB 5073YH (3) 87 mm/jh
