Bill Text: IA SF167 | 2017-2018 | 87th General Assembly | Introduced


Bill Title: A bill for an act relating to revenue and taxation by increasing the sales and use tax rates, establishing transfers to the natural resources and outdoor recreation trust fund, and including effective date provisions.

Spectrum: Moderate Partisan Bill (Democrat 9-1)

Status: (Introduced) 2017-01-31 - Subcommittee: Feenstra, Jochum, and Smith. S.J. 187. [SF167 Detail]

Download: Iowa-2017-SF167-Introduced.html

Senate File 167 - Introduced




                                 SENATE FILE       
                                 BY  BOULTON, TAYLOR,
                                     DOTZLER, JOCHUM, HOGG,
                                     BOLKCOM, DVORSKY, D.
                                     JOHNSON, PETERSEN, and
                                     McCOY

                                      A BILL FOR

  1 An Act relating to revenue and taxation by increasing the sales
  2    and use tax rates, establishing transfers to the natural
  3    resources and outdoor recreation trust fund, and including
  4    effective date provisions.
  5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN



  1  1    Section 1.  Section 423.2, subsection 1, unnumbered
  1  2 paragraph 1, Code 2017, is amended to read as follows:
  1  3    There is imposed a tax of six and three=eighths percent upon
  1  4 the sales price of all sales of tangible personal property,
  1  5 consisting of goods, wares, or merchandise, sold at retail in
  1  6 the state to consumers or users except as otherwise provided
  1  7 in this subchapter.
  1  8    Sec. 2.  Section 423.2, subsections 2 and 3, Code 2017, are
  1  9 amended to read as follows:
  1 10    2.  A tax of six and three=eighths percent is imposed upon
  1 11 the sales price of the sale or furnishing of gas, electricity,
  1 12 water, heat, pay television service, and communication service,
  1 13 including the sales price from such sales by any municipal
  1 14 corporation or joint water utility furnishing gas, electricity,
  1 15 water, heat, pay television service, and communication service
  1 16 to the public in its proprietary capacity, except as otherwise
  1 17 provided in this subchapter, when sold at retail in the state
  1 18 to consumers or users.
  1 19    3.  A tax of six and three=eighths percent is imposed upon
  1 20 the sales price of all sales of tickets or admissions to places
  1 21 of amusement, fairs, and athletic events except those of
  1 22 elementary and secondary educational institutions. A tax of
  1 23 six and three=eighths percent is imposed on the sales price of
  1 24 an entry fee or like charge imposed solely for the privilege of
  1 25 participating in an activity at a place of amusement, fair, or
  1 26 athletic event unless the sales price of tickets or admissions
  1 27 charges for observing the same activity are taxable under this
  1 28 subchapter. A tax of six and three=eighths percent is imposed
  1 29 upon that part of private club membership fees or charges paid
  1 30 for the privilege of participating in any athletic sports
  1 31 provided club members.
  1 32    Sec. 3.  Section 423.2, subsection 4, paragraph a, Code 2017,
  1 33 is amended to read as follows:
  1 34    a.  A tax of six and three=eighths percent is imposed upon
  1 35 the sales price derived from the operation of all forms of
  2  1 amusement devices and games of skill, games of chance, raffles,
  2  2 and bingo games as defined in chapter 99B, and card game
  2  3 tournaments conducted under section 99B.27, that are operated
  2  4 or conducted within the state, the tax to be collected from
  2  5 the operator in the same manner as for the collection of taxes
  2  6 upon the sales price of tickets or admission as provided in
  2  7 this section. Nothing in this subsection shall legalize any
  2  8 games of skill or chance or slot=operated devices which are now
  2  9 prohibited by law.
  2 10    Sec. 4.  Section 423.2, subsection 5, Code 2017, is amended
  2 11 to read as follows:
  2 12    5.  There is imposed a tax of six and three=eighths percent
  2 13 upon the sales price from the furnishing of services as defined
  2 14 in section 423.1.
  2 15    Sec. 5.  Section 423.2, subsection 7, paragraph a,
  2 16 unnumbered paragraph 1, Code 2017, is amended to read as
  2 17 follows:
  2 18    A tax of six and three=eighths percent is imposed upon the
  2 19 sales price from the sales, furnishing, or service of solid
  2 20 waste collection and disposal service.
  2 21    Sec. 6.  Section 423.2, subsection 8, paragraph a, Code 2017,
  2 22 is amended to read as follows:
  2 23    a.  A tax of six and three=eighths percent is imposed on
  2 24 the sales price from sales of bundled transactions. For the
  2 25 purposes of this subsection, a "bundled transaction" is the
  2 26 retail sale of two or more distinct and identifiable products,
  2 27 except real property and services to real property, which
  2 28 are sold for one nonitemized price. A "bundled transaction"
  2 29 does not include the sale of any products in which the sales
  2 30 price varies, or is negotiable, based on the selection by the
  2 31 purchaser of the products included in the transaction.
  2 32    Sec. 7.  Section 423.2, subsection 9, Code 2017, is amended
  2 33 to read as follows:
  2 34    9.  A tax of six and three=eighths percent is imposed upon
  2 35 the sales price from any mobile telecommunications service,
  3  1 including all paging services, that this state is allowed
  3  2 to tax pursuant to the provisions of the federal Mobile
  3  3 Telecommunications Sourcing Act, Pub. L. No. 106=252, 4 U.S.C.
  3  4 {116 et seq. For purposes of this subsection, taxes on mobile
  3  5 telecommunications service, as defined under the federal Mobile
  3  6 Telecommunications Sourcing Act that are deemed to be provided
  3  7 by the customer's home service provider, shall be paid to
  3  8 the taxing jurisdiction whose territorial limits encompass
  3  9 the customer's place of primary use, regardless of where the
  3 10 mobile telecommunications service originates, terminates,
  3 11 or passes through and shall in all other respects be taxed
  3 12 in conformity with the federal Mobile Telecommunications
  3 13 Sourcing Act. All other provisions of the federal Mobile
  3 14 Telecommunications Sourcing Act are adopted by the state of
  3 15 Iowa and incorporated into this subsection by reference. With
  3 16 respect to mobile telecommunications service under the federal
  3 17 Mobile Telecommunications Sourcing Act, the director shall, if
  3 18 requested, enter into agreements consistent with the provisions
  3 19 of the federal Act.
  3 20    Sec. 8.  Section 423.2, subsection 11, paragraph b,
  3 21 subparagraph (2), Code 2017, is amended to read as follows:
  3 22    (2)  Transfer from the remaining revenues the amounts
  3 23 required under Article VII, section 10, of the Constitution
  3 24 of the State of Iowa to the natural resources and outdoor
  3 25 recreation trust fund created in section 461.31, if applicable.
  3 26    Sec. 9.  Section 423.2, subsection 14, Code 2017, is amended
  3 27 to read as follows:
  3 28    14.  The sales tax rate of six and three=eighths percent is
  3 29 reduced to five and three=eighths percent on January 1, 2030.
  3 30    Sec. 10.  Section 423.5, subsection 1, unnumbered paragraph
  3 31 1, Code 2017, is amended to read as follows:
  3 32    Except as provided in paragraph "c", an excise tax at the
  3 33 rate of six and three=eighths percent of the purchase price or
  3 34 installed purchase price is imposed on the following:
  3 35    Sec. 11.  Section 423.5, subsection 5, Code 2017, is amended
  4  1 to read as follows:
  4  2    5.  The use tax rate of six and three=eighths percent is
  4  3 reduced to five and three=eighths percent on January 1, 2030.
  4  4    Sec. 12.  Section 423.43, subsection 1, paragraph b, Code
  4  5 2017, is amended to read as follows:
  4  6    b.  Subsequent to the deposit into the general fund of the
  4  7 state and after the transfer of such pursuant to paragraph "a",
  4  8 the department shall do the following in the order prescribed:
  4  9    (1)  Transfer the revenues collected under chapter 423B, the
  4 10 department shall transfer one=sixth.
  4 11    (2)  Transfer fifteen and six thousand eight hundred
  4 12 sixty=three ten=thousandths percent of such remaining revenues
  4 13 to the secure an advanced vision for education fund created in
  4 14 section 423F.2. This paragraph subparagraph (2) is repealed
  4 15 December 31, 2029.
  4 16    Sec. 13.  PURPOSE.  The purpose of this Act is to provide
  4 17 for the implementation of Article VII, section 10, of the
  4 18 Constitution of the State of Iowa by fully funding the natural
  4 19 resources and outdoor recreation trust fund as created in
  4 20 section 461.31, pursuant to Article VII, section 10, of the
  4 21 Constitution of the State of Iowa.
  4 22    Sec. 14.  EFFECTIVE DATE.  This Act takes effect on July 1,
  4 23 2018.
  4 24                           EXPLANATION
  4 25 The inclusion of this explanation does not constitute agreement with
  4 26 the explanation's substance by the members of the general assembly.
  4 27    This bill relates to state sales and use taxes and to an
  4 28 amendment to the Iowa Constitution ratified on November 2,
  4 29 2010, which created a natural resources and outdoor recreation
  4 30 trust fund (fund) and dedicated a portion of state revenues to
  4 31 the fund for the purposes of protecting and enhancing water
  4 32 quality and natural areas in the state including parks, trails,
  4 33 and fish and wildlife habitat, and conserving agricultural
  4 34 soils in the state (Article VII, section 10).  The fund is
  4 35 codified in Code section 461.31.  Pursuant to the amendment,
  5  1 the amount credited to the fund will be equal to the amount
  5  2 generated by an increase in the state sales tax rate occurring
  5  3 after the effective date of the constitutional amendment, but
  5  4 shall not exceed the amount that a state sales tax rate of
  5  5 0.375 percent would generate.  The state sales tax rate has not
  5  6 been increased since the effective date of the constitutional
  5  7 amendment, so no amounts have been credited to the fund.  The
  5  8 bill increases from 6 percent to 6.375 percent the state
  5  9 sales tax rate and the state use tax rate, and provides for
  5 10 the transfer of sales tax revenues to the fund.  The bill
  5 11 also amends the transfer of use tax revenues to the secure
  5 12 an advanced vision for education fund (SAVE) in Code section
  5 13 423F.2 from 1/6th (approximately 16.66 percent) of the revenues
  5 14 to 15.6863 percent of the revenues to ensure that SAVE receives
  5 15 approximately the same proportion of the total use tax revenue
  5 16 as it did prior to the use tax rate increase provided in the
  5 17 bill.
  5 18    The bill takes effect July 1, 2018.
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