Bill Text: IA HF2438 | 2013-2014 | 85th General Assembly | Enrolled

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Bill Title: A bill for an act relating to the administration of the tax and related laws of the state, including administration by the department of revenue of certain tax credits and refunds, income taxes, franchise taxes, sales and use taxes, hotel and motel taxes, and equipment taxes, and modifying provisions relating to the property assessment appeal board, and including effective date and retroactive applicability provisions. Effective 7-1-14, with exception of Divisions VI and VII, effective 4-10-14.

Spectrum: Committee Bill

Status: (Passed) 2014-04-10 - Signed by Governor. H.J. 719. [HF2438 Detail]

Download: Iowa-2013-HF2438-Enrolled.html

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House File 2438
AN ACT
RELATING TO THE ADMINISTRATION OF THE TAX AND RELATED LAWS OF
THE STATE, INCLUDING ADMINISTRATION BY THE DEPARTMENT OF
REVENUE OF CERTAIN TAX CREDITS AND REFUNDS, INCOME TAXES,
FRANCHISE TAXES, SALES AND USE TAXES, HOTEL AND MOTEL TAXES,
AND EQUIPMENT TAXES, AND MODIFYING PROVISIONS RELATING
TO THE PROPERTY ASSESSMENT APPEAL BOARD, AND INCLUDING
EFFECTIVE DATE AND RETROACTIVE APPLICABILITY PROVISIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
DIVISION I
MISCELLANEOUS ADMINISTRATIVE CHANGES
Section 1. Section 421.17, Code 2014, is amended by adding
the following new subsection:
NEW SUBSECTION . 33. To adopt rules ensuring that the total
amount of transfers and disbursements in a fiscal year by the
department to a local government or other entity with respect
to projects under chapter 15J, chapter 418, or section 423B.10
does not exceed the amount of applicable taxes collected during
the same fiscal year within the geographic boundaries of the
reinvestment districts, governmental entities, or urban renewal
areas in which such projects are located.
Sec. 2. Section 441.37A, subsection 1, paragraph e, Code
2014, is amended to read as follows:
e. For the assessment year beginning January 1, 2014, the
The property assessment appeal board may, by rule, provide
for the filing of a notice of appeal and petition with the
secretary of the board by electronic means. All requirements
of this section for an appeal to the board shall apply to an
appeal filed electronically.
DIVISION II

House File 2438, p. 2
TAX CREDITS AND REFUNDS
Sec. 3. Section 15.293A, subsection 2, paragraph b,
subparagraph (1), Code 2014, is amended to read as follows:
(1) To claim a redevelopment tax credit under this
section , a taxpayer must attach include one or more tax credit
certificates to with the taxpayer’s tax return. A tax credit
certificate shall not be used or attached to included with a
return filed for a taxable year beginning prior to July 1,
2009.
Sec. 4. Section 15.331C, subsection 2, Code 2014, is amended
to read as follows:
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. After receiving the form
from the third-party developer, the department of revenue
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.
The aggregate combined total amount of tax refunds under
section 15.331A for taxes 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 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 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

House File 2438, p. 3
unless a tax credit certificate issued by the department of
revenue is attached to 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. 5. Section 15E.44, subsection 4, Code 2014, is amended
to read as follows:
4. After verifying the eligibility of a qualifying
business, the authority shall issue a tax credit certificate to
be attached to included with the equity investor’s tax return.
The tax credit certificate shall contain the taxpayer’s name,
address, tax identification number, the amount of credit, the
name of the qualifying business, and other information required
by the department of revenue. The tax credit certificate,
unless rescinded by the authority, shall be accepted by the
department of revenue as payment for taxes imposed pursuant
to chapter 422, divisions II, III, and V , and in chapter
432 , and for the moneys and credits tax imposed in section
533.329 , subject to any conditions or restrictions placed by
the authority upon the face of the tax credit certificate and
subject to the limitations of section 15E.43 .
Sec. 6. Section 15E.45, subsection 4, Code 2014, is amended
to read as follows:
4. After verifying the eligibility of the community-based
seed capital fund, the authority shall issue a tax credit
certificate to be attached to included with the taxpayer’s
tax return. The tax credit certificate shall contain the
taxpayer’s name, address, tax identification number, the amount
of the tax credit, the name of the community-based seed capital
fund, and other information required by the department of
revenue. The tax credit certificate, unless rescinded by the
authority, shall be accepted by the department of revenue or
a local taxing district, as applicable, as payment for taxes
imposed pursuant to chapter 422, divisions II, III, and V , and
chapter 432 , and as payment for the moneys and credits tax
imposed pursuant to section 533.329 , subject to any conditions
or restrictions placed by the authority on the face of the tax
credit certificate and subject to the limitations of section
15E.43 .
Sec. 7. Section 15E.193B, subsection 6, paragraph a, Code
2014, is amended to read as follows:

House File 2438, p. 4
a. An eligible housing business may claim a tax credit
up to a maximum of ten percent of the new investment which
is directly related to the building or rehabilitating of a
minimum of four single-family homes located in that part of
a city or county in which there is a designated enterprise
zone or one multiple dwelling unit building containing three
or more individual dwelling units located in that part of a
city or county in which there is a designated enterprise zone.
The new investment that may be used to compute the tax credit
shall not exceed the new investment used for the first one
hundred forty thousand dollars of value for each single-family
home or for each unit of a multiple dwelling unit building
containing three or more units. The tax credit may be used to
reduce the tax liability liabilities imposed under chapter 422,
division divisions II, III, or and V , or and chapter 432 . 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. If the business is
a partnership, S corporation, limited liability company, or
estate or trust electing to have the income taxed directly to
the individual, an individual may claim the tax credit allowed.
The amount claimed by the individual shall be based upon the
pro rata share of the individual’s earnings of the partnership,
S corporation, limited liability company, or estate or trust
except as allowed for under subsection 8 when low-income
housing tax credits authorized under section 42 of the Internal
Revenue Code are used to assist in the financing of the housing
development.
Sec. 8. Section 15E.193B, subsection 8, Code 2014, is
amended to read as follows:
8. a. The amount of the tax credits determined pursuant
to subsection 6 , paragraph “a” , for each project shall be
approved by the economic development authority. The authority
shall utilize the financial information required to be provided
under subsection 5 , paragraph “e” , to determine the tax credits
allowed for each project. In determining the amount of tax
credits to be allowed for a project, the authority shall not
include the portion of the project cost financed through
federal, state, and local government tax credits, grants,
and forgivable loans. Upon approving the amount of the tax
credit, the economic development authority shall issue a tax
credit certificate to the eligible housing business except
when low-income housing tax credits authorized under section

House File 2438, p. 5
42 of the Internal Revenue Code are used to assist in the
financing of the housing development in which case the tax
credit certificate may be issued to a partner if the business
is a partnership, a shareholder if the business is an S
corporation, or a member if the business is a limited liability
company in the amounts designated by the eligible partnership,
S corporation, or limited liability company. An eligible
housing business or the designated partner if the business is
a partnership, designated shareholder if the business is an S
corporation, or designated member if the business is a limited
liability company, or transferee shall not claim the tax credit
unless a tax credit certificate is attached to included with
the taxpayer’s return for the tax year for which the tax
credit is claimed. The tax credit certificate shall contain
the taxpayer’s name, address, tax identification number, the
amount of the tax credit, and other information required by
the department of revenue. The tax credit certificate shall
be transferable if the housing development is located in a
brownfield site as defined in section 15.291 , if the housing
development is located in a blighted area as defined in section
403.17 , or if low-income housing tax credits authorized under
section 42 of the Internal Revenue Code are used to assist in
the financing of the housing development. Not more than three
million dollars worth of tax credits for housing developments
that are located in a brownfield site as defined in section
15.291 or housing developments located in a blighted area as
defined in section 403.17 shall be transferred in one calendar
year. The three million dollar annual limit does not apply
to tax credits awarded to an eligible housing business having
low-income housing tax credits authorized under section 42 of
the Internal Revenue Code to assist in the financing of the
housing development. The authority may approve an application
for tax credit certificates for transfer from an eligible
housing business located in a brownfield site as defined in
section 15.291 or in a blighted area as defined in section
403.17 that would result in the issuance of more than three
million dollars of tax credit certificates for transfer,
provided the authority, through negotiation with the eligible
business, allocates those tax credit certificates for transfer
over more than one calendar year. The authority shall not
approve more than one million five hundred thousand dollars
in tax credit certificates for transfer to any one eligible
housing business located in a brownfield site as defined in

House File 2438, p. 6
section 15.291 or in a blighted area as defined in section
403.17 in a calendar year. If three million dollars in tax
credit certificates for transfer have not been issued at the
end of a calendar year, the remaining tax credit certificates
for transfer may be issued in advance to an eligible housing
business scheduled to receive a tax credit certificate for
transfer in a later calendar year. Any time the authority
approves a tax credit certificate for transfer which has not
been allocated at the end of a calendar year, the authority may
prorate the remaining certificates to more than one eligible
applicant. If the entire three million dollars of tax credit
certificates for transfer is not issued in a given calendar
year, the remaining amount may be carried over to a succeeding
calendar year. Tax credit certificates issued under this
chapter may be transferred to any person or entity. The
economic development authority shall notify the department
of revenue of the tax credit certificates which have been
approved for transfer. Within ninety days of transfer, the
transferee must submit the transferred tax credit certificate
to the department of revenue along with a statement containing
the transferee’s name, tax identification number, and
address, and the denomination that each replacement tax credit
certificate is to carry and any other information required by
the department of revenue. Within thirty days of receiving
the transferred tax credit certificate and the transferee’s
statement, the department of revenue shall issue one or more
replacement tax credit certificates to the transferee. Each
replacement certificate must contain the information required
to receive the original certificate and must have the same
expiration date that appeared in the transferred tax credit
certificate. Tax credit certificate amounts of less than the
minimum amount established by rule of the economic development
authority shall not be transferable. A tax credit shall not be
claimed by a transferee under subsection 6 , paragraph “a” , until
a replacement tax credit certificate identifying the transferee
as the proper holder has been issued.
b. The transferee may use the amount of the tax credit
transferred against the taxes imposed under chapter 422,
divisions II, III, and V , and chapter 432 for any tax year the
original transferor could have claimed the tax credit. Any
consideration received for the transfer of the tax credit shall
not be included as income under chapter 422, divisions II, III,
and V . Any consideration paid for the transfer of the tax

House File 2438, p. 7
credit shall not be deducted from income under chapter 422,
divisions II, III, and V .
Sec. 9. Section 16.211, subsection 2, paragraphs a and b,
Code 2014, are amended to read as follows:
a. To claim a disaster recovery housing project tax
credit under this section , a taxpayer must attach include one
or more tax credit certificates to with the taxpayer’s tax
return. The tax credit certificate or certificates attached
to included with the taxpayer’s tax return shall be issued in
the taxpayer’s name, expire on or after the last day of the
taxable year for which the taxpayer is claiming the tax credit,
and show a tax credit amount equal to or greater than the tax
credit claimed on the taxpayer’s tax return.
b. After verifying the eligibility of a taxpayer for a tax
credit pursuant to this section , the authority shall issue a
disaster recovery housing project tax credit certificate to be
attached to included with the taxpayer’s tax return. The tax
credit certificate shall contain the taxpayer’s name, address,
tax identification number; the amount of the credit; and any
other information required by the department of revenue.
Sec. 10. Section 175.37, subsection 7, unnumbered paragraph
1, Code 2014, is amended to read as follows:
A taxpayer shall not claim a tax credit under this section
unless a tax credit certificate issued by the authority is
attached to included with the taxpayer’s tax return for the
tax year for which the tax credit is claimed. The authority
must review and approve an application for a tax credit as
provided by rules adopted by the authority. The application
must include a copy of the agricultural assets transfer
agreement. The authority may approve an application and issue
a tax credit certificate to a taxpayer who has previously been
allowed a tax credit under this section . The authority may
require that the parties to an agricultural assets transfer
agreement provide additional information as determined relevant
by the authority. The authority shall review an application
for a tax credit which includes the renewal of an agricultural
assets transfer agreement to determine that the parties to the
renewed agreement meet the same qualifications as required for
an original application. The authority shall not approve an
application or issue a tax credit certificate to a taxpayer for
an amount in excess of fifty thousand dollars. In addition,
the authority shall not approve an application or issue a
certificate to a taxpayer if any of the following applies:

House File 2438, p. 8
Sec. 11. Section 175.38, subsection 10, unnumbered
paragraph 1, Code 2014, is amended to read as follows:
A taxpayer shall not claim a custom farming contract tax
credit unless a tax credit certificate issued by the authority
under this section is attached to included with the taxpayer’s
tax return for the tax year for which the tax credit is
claimed. The authority must review and approve an application
for a tax credit certificate as provided by rules adopted
by the authority. The application must include a copy of
the custom farming contract. The authority may approve an
application and issue a tax credit certificate to a taxpayer
who has previously been allowed a tax credit under this
section . The authority may require that the parties to the
contract provide additional information as determined relevant
by the authority. The authority shall review an application
for a tax credit certificate which includes the renewal of a
contract to determine that the parties to the renewed contract
meet the same qualifications as required for an original
application. The authority shall not approve an application or
issue a tax credit certificate to a taxpayer for an amount in
excess of fifty thousand dollars. In addition, the authority
shall not approve an application or issue a tax credit
certificate to a taxpayer if any of the following applies:
Sec. 12. Section 404A.1, subsection 1, paragraph a, Code
2014, is amended to read as follows:
a. A historic preservation and cultural and entertainment
district tax credit, subject to the availability of the credit,
is granted against the tax taxes imposed under chapter 422,
division divisions II, III, or and V , or and chapter 432 , for
the substantial rehabilitation of eligible property located in
this state as provided in this chapter .
Sec. 13. Section 404A.4, subsection 2, unnumbered paragraph
1, Code 2014, is amended to read as follows:
After verifying the eligibility for the tax credit, the
state historic preservation office shall issue a historic
preservation and cultural and entertainment district tax credit
certificate to be attached to included with the person’s
tax return. The tax credit certificate shall contain the
taxpayer’s name, address, tax identification number, the date
of project completion, the amount of credit, other information
required by the department of revenue, and a place for the name
and tax identification number of a transferee and the amount of
the tax credit being transferred. Of the amount of tax credits

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that may be approved in a fiscal year pursuant to subsection
4 , paragraph “a” :
Sec. 14. Section 422.11S, subsection 7, paragraph a, Code
2014, is amended to read as follows:
a. In order for the taxpayer to claim the school tuition
organization tax credit under subsection 1 , a tax credit
certificate issued by the school tuition organization to which
the contribution was made shall be attached to included with
the person’s tax return. The tax credit certificate shall
contain the taxpayer’s name, address, tax identification
number, the amount of the contribution, the amount of the
credit, and other information required by the department.
Sec. 15. Section 437A.17B, Code 2014, is amended to read as
follows:
437A.17B Reimbursement for renewable energy.
A person in possession of a wind energy tax credit
certificate issued pursuant to chapter 476B or a renewable
energy tax credit certificate issued pursuant to chapter 476C
may apply to the director for a reimbursement of the amount of
taxes imposed and paid by the person pursuant to this chapter
in an amount not more than the person received in wind energy
tax credit certificates pursuant to chapter 476B or renewable
energy tax credit certificates pursuant to chapter 476C . To
obtain the reimbursement, the person shall attach to include
with the return required under section 437A.8 the wind energy
tax credit certificates issued to the person pursuant to
chapter 476B , or the renewable energy tax credit certificates
issued to the person pursuant to chapter 476C , and provide any
other information the director may require. The director shall
direct a warrant to be issued to the person for an amount equal
to the tax imposed and paid by the person pursuant to this
chapter but for not more than the amount of the wind energy tax
credit certificates or renewable energy tax credit certificates
attached to included with the return.
Sec. 16. Section 476B.6, subsection 8, Code 2014, is amended
to read as follows:
8. A tax credit certificate shall not be used or attached
to included with a return filed for a taxable year beginning
prior to July 1, 2006.
Sec. 17. Section 476B.8, Code 2014, is amended to read as
follows:
476B.8 Use of tax credit certificates.
To claim a wind energy production tax credit under this

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chapter , a taxpayer must attach include one or more tax credit
certificates to with the taxpayer’s tax return, or if used
against taxes imposed under chapter 423 , the taxpayer shall
comply with section 423.4, subsection 4 , or if used against
taxes imposed under chapter 437A , the taxpayer shall comply
with section 437A.17B . A tax credit certificate shall not
be used or attached to included with a return filed for a
taxable year beginning prior to July 1, 2006. The tax credit
certificate or certificates attached to included with the
taxpayer’s tax return shall be issued in the taxpayer’s name,
expire on or after the last day of the taxable year for which
the taxpayer is claiming the tax credit, and show a tax credit
amount equal to or greater than the tax credit claimed on
the taxpayer’s tax return. Any tax credit in excess of the
taxpayer’s tax liability for the taxable year may be credited
to the taxpayer’s tax liability for the following seven taxable
years or until depleted, whichever is the earlier. If the tax
credit is applied against the taxes imposed under chapter 423
or 437A , any credit in excess of the taxpayer’s tax liability
is carried over and can be filed with the refund claim for
the following seven tax years or until depleted, whichever is
earlier. However, the certificate shall not be used to reduce
tax liability for a tax period ending after the expiration date
of the certificate.
Sec. 18. Section 476C.6, subsection 2, Code 2014, is amended
to read as follows:
2. To claim a renewable energy tax credit under this
chapter , a taxpayer must attach include one or more tax credit
certificates to with the taxpayer’s tax return, or if used
against taxes imposed under chapter 423 , the taxpayer shall
comply with section 423.4, subsection 4 , or if used against
taxes imposed under chapter 437A , the taxpayer shall comply
with section 437A.17B . A tax credit certificate shall not
be used or attached to included with a return filed for a
taxable year beginning prior to July 1, 2006. The tax credit
certificate or certificates attached to included with the
taxpayer’s tax return shall be issued in the taxpayer’s name,
expire on or after the last day of the taxable year for which
the taxpayer is claiming the tax credit, and show a tax credit
amount equal to or greater than the tax credit claimed on
the taxpayer’s tax return. Any tax credit in excess of the
taxpayer’s tax liability for the taxable year may be credited
to the taxpayer’s tax liability for the following seven tax

House File 2438, p. 11
years or until the credit is depleted, whichever is earlier.
If the tax credit is applied against the taxes imposed under
chapter 423 or 437A , any credit in excess of the taxpayer’s
tax liability is carried over and can be filed with the refund
claim for the following seven tax years or until depleted,
whichever is earlier. However, the certificate shall not be
used to reduce tax liability for a tax period ending after the
expiration date of the certificate.
DIVISION III
INCOME TAXES
Sec. 19. Section 422.7, subsection 2, paragraph i, Code
2014, is amended by striking the paragraph.
Sec. 20. Section 422.13, Code 2014, is amended to read as
follows:
422.13 Return by individual.
1. Except as provided in subsection 2 , a A resident or
nonresident of this state shall make a return, signed in
accordance with forms and rules prescribed by the director, if
any of the following are applicable:
a. The individual has net income of more than nine thousand
dollars for the tax year from sources taxable under this
division .
b. a. The individual is claimed as a dependent on another
person’s return and has net income of five thousand dollars or
more for the tax year from sources taxable under this division .
c. b. However, if that part of the The net income of a
nonresident which is allocated to Iowa pursuant to section
422.8, subsection 2 , is less than one thousand dollars the
nonresident is not required to make and sign a return except
when the or more for the tax year from sources taxable under
this division, unless the nonresident’s total net income,
as determined under section 422.5, subsection 3 or 3B, does
not exceed the appropriate dollar amount listed in section
422.5, subsection 3 or 3B, upon which tax is not imposed. The
portion of a lump sum distribution that is allocable to Iowa
is included in net income for purposes of determining if the
nonresident’s net income allocable to Iowa is one thousand
dollars or more.
c. A nonresident is subject to the state alternative minimum
tax imposed pursuant to section 422.5, subsection 2 .
2. d. Notwithstanding any other provision in this section ,
The total net income, as determined under section 422.5,
subsection 3 or 3B, of a resident or nonresident of this state

House File 2438, p. 12
is not required to make and file a return if the person’s net
income is equal to or less more than the appropriate dollar
amount listed in section 422.5, subsection 3 or 3B , upon
which tax is not imposed. A nonresident of this state is
not required to make and file a return if the person’s total
net income in section 422.5, subsection 1 , paragraph “j” , is
equal to or less than the appropriate dollar amount provided
in section 422.5, subsection 3 , upon which tax is not imposed.
For purposes of this subsection , the amount of a lump sum
distribution subject to separate federal tax shall be included
in net income for purposes of determining if a resident is
required to file a return and the portion of the lump sum
distribution that is allocable to Iowa is included in total net
income for purposes of determining if a nonresident is required
to make and file a return.
3. 2. For purposes of determining the requirement for
filing a return under subsection 1 , the combined net income of
a husband and wife from sources taxable under this division
shall be considered.
4. 3. If the taxpayer is unable to make the return,
the return shall be made by a duly authorized agent or by a
guardian or other person charged with the care of the person or
property of the taxpayer.
5. 4. A nonresident taxpayer shall file a copy of the
taxpayer’s federal income tax return for the current tax year
with the return required by this section .
6. 5. a. Notwithstanding subsections 1 through 5 4
and sections 422.15 and 422.36 , a partnership, a limited
liability company whose members are taxed on the company’s
income under provisions of the Internal Revenue Code, trust, or
corporation whose stockholders are taxed on the corporation’s
income under the provisions of the Internal Revenue Code may,
not later than the due date for filing its return for the
taxable year, including any extension thereof, elect to file
a composite return for the nonresident partners, members,
beneficiaries, or shareholders. Nonresident trusts or estates
which are partners, members, beneficiaries, or shareholders
in partnerships, limited liability companies, trusts, or S
corporations may also be included on a composite return. The
director may require that a composite return be filed under the
conditions deemed appropriate by the director. A partnership,
limited liability company, trust, or corporation filing a
composite return is liable for tax required to be shown due on

House File 2438, p. 13
the return.
b. Notwithstanding subsections 1 through 5 4 and sections
422.15 and 422.36 , if the director determines that it is
necessary for the efficient administration of this chapter ,
the director may require that a composite return be filed
for nonresidents other than nonresident partners, members,
beneficiaries or shareholders in partnerships, limited
liability companies, trusts, or S corporations.
c. All powers of the director and requirements of the
director apply to returns filed under this subsection including
but not limited to the provisions of this division and division
VI of this chapter .
Sec. 21. RETROACTIVE APPLICABILITY. This division of this
Act applies retroactively to January 1, 2014, for tax years
beginning on or after that date.
DIVISION IV
SALES AND USE TAXES
Sec. 22. Section 423.3, subsection 18, paragraph e, Code
2014, is amended to read as follows:
e. Community health Health centers as defined in 42 U.S.C.
§ 254c and migrant health centers as defined in 42 U.S.C.
§254b.
DIVISION V
HOTEL AND MOTEL TAXES
Sec. 23. Section 423A.6, Code 2014, is amended to read as
follows:
423A.6 Administration by director.
1. The director of revenue shall administer the state and
local hotel and motel tax as nearly as possible in conjunction
with the administration of the state sales tax law, except
that portion of the law which implements the streamlined sales
and use tax agreement. The director shall provide appropriate
forms, or provide on the regular state tax forms, for reporting
state and local hotel and motel tax liability. All moneys
received or refunded one hundred eighty days after the date on
which a city or county terminates its local hotel and motel
tax and all moneys received from the state hotel and motel tax
shall be deposited in or withdrawn from the general fund of the
state. Beginning
2. If a reinvestment district is established under chapter
15J, beginning the first day of the calendar quarter beginning
on the reinvestment district’s commencement date, the director
of revenue shall, subject to remittance limitations established

House File 2438, p. 14
by the economic development authority board pursuant to section
15J.4, subsection 3 , transfer from the general fund of the
state to a district account created in the state reinvestment
district fund for each reinvestment district established
under chapter 15J , the new state hotel and motel tax revenue,
determined in section 15J.5, subsection 2 , paragraph “b” , in
the district. Such transfers shall cease pursuant to section
15J.8 .
2. 3. The director, in consultation with local officials,
shall collect and account for a local hotel and motel tax and
shall credit all revenues to the local transient guest tax fund
created in section 423A.7 . Local authorities shall not require
any tax permit not required by the director of revenue.
3. 4. 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 ,
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 filing of returns and for other
than quarterly 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 or any individual
are deemed to be held in trust for the state of Iowa and the
local jurisdictions imposing the taxes.
DIVISION VI
EQUIPMENT TAXES
Sec. 24. Section 423D.3, Code 2014, is amended to read as
follows:
423D.3 Exemption.
The sales price on the lease or rental of equipment to
contractors for direct and primary use in construction is
exempt from the tax imposed by this chapter . The sales price
from transactions exempt from state sales tax under section
423.3 is also exempt from the tax imposed by this chapter .
Sec. 25. EFFECTIVE UPON ENACTMENT. This division of this
Act, being deemed of immediate importance, takes effect upon

House File 2438, p. 15
enactment.
Sec. 26. RETROACTIVE APPLICABILITY. This division of this
Act applies retroactively to July 1, 2008, for all sales or
uses of equipment on or after that date.
DIVISION VII
FRANCHISE TAXES
Sec. 27. Section 422.60, Code 2014, is amended by adding the
following new subsection:
NEW SUBSECTION . 12. a. The taxes imposed under this
division shall be reduced by a solar energy system tax credit
equal to fifty percent of the federal energy credit related to
solar energy systems provided in section 48 of the Internal
Revenue Code, not to exceed fifteen thousand dollars.
b. The taxpayer may claim the credit pursuant to this
subsection according to the same requirements, conditions, and
limitations as provided pursuant to section 422.11L.
Sec. 28. EFFECTIVE UPON ENACTMENT. This division of this
Act, being deemed of immediate importance, takes effect upon
enactment.
Sec. 29. RETROACTIVE APPLICABILITY. This division of this
Act applies retroactively to January 1, 2014, for tax years
beginning on or after that date.
______________________________
KRAIG PAULSEN
Speaker of the House
______________________________
PAM JOCHUM
President of the Senate
I hereby certify that this bill originated in the House and
is known as House File 2438, Eighty-fifth General Assembly.
______________________________
CARMINE BOAL
Chief Clerk of the House
Approved _______________, 2014
______________________________
TERRY E. BRANSTAD
Governor