Senate File 2054 - Introduced
SENATE FILE
BY FEENSTRA
A BILL FOR
1 An Act exempting from the state sales tax the sales price from
2 the sale or furnishing of metered water to residential
3 customers and creating related state and local residential
4 metered water excise taxes.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 Section 1. Section 423.3, Code 2016, is amended by adding
1 2 the following new subsection:
1 3 NEW SUBSECTION. 103. The sales price from the sale or
1 4 furnishing of metered water to residential customers for use at
1 5 residential dwellings and units of apartment and condominium
1 6 complexes used for human occupancy.
1 7 Sec. 2. NEW SECTION. 423G.1 Short title.
1 8 This chapter may be cited as the "Residential Metered Water
1 9 Tax Act".
1 10 Sec. 3. NEW SECTION. 423G.2 Definitions.
1 11 All words and phrases used in this chapter and defined in
1 12 section 423.1 have the same meaning given them by section 423.1
1 13 for purposes of this chapter.
1 14 Sec. 4. NEW SECTION. 423G.3 State=imposed residential
1 15 metered water tax.
1 16 1. A tax at the rate specified in subsection 2 is imposed on
1 17 the sales price from the sale or furnishing of metered water
1 18 to residential customers for use at residential dwellings and
1 19 units of apartment and condominium complexes used for human
1 20 occupancy.
1 21 2. a. If the date of the utility billing or meter reading
1 22 cycle of the residential customer for the sale or furnishing
1 23 of metered water is on or after July 1, 2016, but before July
1 24 1, 2017, or if the sale or furnishing of the water and the
1 25 delivery of the water occurs on or after July 1, 2016, but
1 26 before July 1, 2017, the rate of tax is six percent.
1 27 b. If the date of the utility billing or meter reading
1 28 cycle of the residential customer for the sale or furnishing
1 29 of metered water is on or after July 1, 2017, but before July
1 30 1, 2018, or if the sale or furnishing of the water and the
1 31 delivery of the water occurs on or after July 1, 2017, but
1 32 before July 1, 2018, the rate of tax is five percent.
1 33 c. If the date of the utility billing or meter reading
1 34 cycle of the residential customer for the sale or furnishing
1 35 of metered water is on or after July 1, 2018, but before July
2 1 1, 2019, or if the sale or furnishing of the water and the
2 2 delivery of the water occurs on or after July 1, 2018, but
2 3 before July 1, 2019, the rate of tax is four percent.
2 4 d. If the date of the utility billing or meter reading
2 5 cycle of the residential customer for the sale or furnishing
2 6 of metered water is on or after July 1, 2019, but before July
2 7 1, 2020, or if the sale or furnishing of the water and the
2 8 delivery of the water occurs on or after July 1, 2019, but
2 9 before July 1, 2020, the rate of tax is three percent.
2 10 e. If the date of the utility billing or meter reading
2 11 cycle of the residential customer for the sale or furnishing
2 12 of metered water is on or after July 1, 2020, but before July
2 13 1, 2021, or if the sale or furnishing of the water and the
2 14 delivery of the water occurs on or after July 1, 2020, but
2 15 before July 1, 2021, the rate of tax is two percent.
2 16 f. If the date of the utility billing or meter reading
2 17 cycle of the residential customer for the sale or furnishing of
2 18 metered water is on or after July 1, 2021, but before January
2 19 1, 2030, or if the sale or furnishing of the water and the
2 20 delivery of the water occurs on or after July 1, 2021, but
2 21 before January 1, 2030, the rate of tax is one percent.
2 22 g. If the date of the utility billing or meter reading
2 23 cycle of the residential customer for the sale or furnishing
2 24 of metered water, or the date of the sale or furnishing of the
2 25 water and the delivery of the water, is on or after January 1,
2 26 2030, the rate of tax is zero percent.
2 27 3. This section is repealed June 30, 2030.
2 28 Sec. 5. NEW SECTION. 423G.4 Locally imposed residential
2 29 metered water tax.
2 30 1. a. A county that is not subject to subsection 2 may
2 31 impose a local residential metered water tax at a rate of not
2 32 more than one percent of the sales price from the sale or
2 33 furnishing of metered water to residential customers for use at
2 34 residential dwellings and units of apartment and condominium
2 35 complexes used for human occupancy. The tax shall be imposed,
3 1 collected, and administered in the same manner as the local
3 2 sales and services tax in chapter 423B and sections 423B.1 and
3 3 423B.5 through 423B.10, consistent with the provisions of this
3 4 chapter, shall apply with respect to the tax authorized under
3 5 this subsection, in the same manner and with the same effect as
3 6 if the local residential metered water tax was a local sales
3 7 and services tax within the meaning of those statutes.
3 8 b. The question of the imposition of a local residential
3 9 metered water tax may be submitted at the same election as the
3 10 local option taxes authorized under chapter 423B and shall be
3 11 stated on the ballot as questions to be voted on separately.
3 12 c. This subsection shall not be construed to require a
3 13 county to impose a local residential metered water tax if the
3 14 question of imposing a local sales and services tax is approved
3 15 at election.
3 16 2. a. If a city or county has in effect a local sales
3 17 and services tax under chapter 423B on the effective date of
3 18 this Act, that city or county shall impose on and after the
3 19 effective date of this Act a local residential metered water
3 20 tax at the same rate as the local sales and services tax on
3 21 the sales price from the sale or furnishing of metered water
3 22 to residential customers for use at residential dwellings and
3 23 units of apartment and condominium complexes used for human
3 24 occupancy. The local residential metered water tax shall be
3 25 imposed, collected, and administered in the same manner and
3 26 with the same effect as the city's or county's local sales
3 27 and services tax under chapter 423B and sections 423B.1 and
3 28 423B.5 through 423B.10, consistent with the provisions of this
3 29 chapter, shall apply with respect to the tax imposed under this
3 30 subsection, in the same manner and with the same effect as if
3 31 the local residential metered water tax was a local sales and
3 32 services tax within the meaning of chapter 423B.
3 33 b. The city or county shall within 60 days of the effective
3 34 date of this Act amend its local sales and services tax
3 35 ordinance to reflect the imposition of the local residential
4 1 metered water tax under this subsection.
4 2 c. The city or county shall continue to collect the local
4 3 residential metered water tax imposed under this subsection
4 4 until such time as the local sales and services tax in effect
4 5 on the effective date of this Act is repealed by the city or
4 6 county.
4 7 Sec. 6. NEW SECTION. 423G.5 Exemptions.
4 8 The sales price from transactions exempt from state sales
4 9 tax under section 423.3, except section 423.3, subsection 103,
4 10 is also exempt from the tax imposed by this chapter.
4 11 Sec. 7. NEW SECTION. 423G.6 Administration by director.
4 12 1. The director of revenue shall administer the state and
4 13 local residential metered water tax as nearly as possible in
4 14 conjunction with the administration of the state sales and use
4 15 tax law, except that portion of the law which implements the
4 16 streamlined sales and use tax agreement. The director shall
4 17 provide appropriate forms, or provide on the regular state tax
4 18 forms, for reporting state and local residential metered water
4 19 tax liability.
4 20 2. The director may require all persons who are engaged
4 21 in the business of deriving any sales price or purchase
4 22 price subject to tax under this chapter to register with
4 23 the department. The director may also require a tax permit
4 24 applicable only to this chapter for any retailer not
4 25 collecting, or any user not paying, taxes under chapter 423.
4 26 3. Section 422.25, subsection 4, sections 422.30, 422.67,
4 27 and 422.68, section 422.69, subsection 1, sections 422.70,
4 28 422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
4 29 1, and sections 423.23, 423.24, 423.25, 423.31 through
4 30 423.35, 423.37 through 423.42, and 423.47, consistent with
4 31 the provisions of this chapter, shall apply with respect to
4 32 the taxes authorized under this chapter, in the same manner
4 33 and with the same effect as if the excise taxes on the sale
4 34 or furnishing of metered water to residential customers were
4 35 retail sales taxes within the meaning of those statutes.
5 1 Notwithstanding this subsection, the director shall provide
5 2 for quarterly filing of returns and for other than quarterly
5 3 filing of returns both as prescribed in section 423.31. All
5 4 taxes collected under this chapter by a retailer or any user
5 5 are deemed to be held in trust for the state of Iowa.
5 6 Sec. 8. NEW SECTION. 423G.7 Deposit of revenues.
5 7 1. All moneys received and all refunds shall be deposited in
5 8 or withdrawn from the general fund of the state.
5 9 2. The director, in consultation with local officials,
5 10 shall collect and account for a local residential metered
5 11 water tax and shall credit all revenues in the same manner
5 12 as provided in section 423B.7. Local authorities shall not
5 13 require any tax permit not required by the director of revenue.
5 14 3. Subsequent to the deposit in the general fund of the
5 15 state, the department shall do the following in the order
5 16 prescribed:
5 17 a. Transfer the revenues collected under section 423G.3 in
5 18 the manner prescribed in section 423B.7.
5 19 b. (1) Transfer from the remaining revenues the following
5 20 amounts to the secure an advanced vision for education fund
5 21 created in section 423F.2:
5 22 (a) For revenues collected on or after July 1, 2016, but
5 23 before August 1, 2017, one=sixth of the remaining revenues.
5 24 (b) For revenues collected on or after August 1, 2017, but
5 25 before August 1, 2018, one=fifth of the remaining revenues.
5 26 (c) For revenues collected on or after August 1, 2018, but
5 27 before August 1, 2019, one=fourth of the remaining revenues.
5 28 (d) For revenues collected on or after August 1, 2019, but
5 29 before August 1, 2020, one=third of the remaining revenues.
5 30 (e) For revenues collected on or after August 1, 2020, but
5 31 before August 1, 2021, one=half of the remaining revenues.
5 32 (f) For revenues collected on or after August 1, 2021, one
5 33 hundred percent of the remaining revenues.
5 34 (2) This paragraph is repealed June 30, 2030.
5 35 EXPLANATION
6 1 The inclusion of this explanation does not constitute agreement with
6 2 the explanation's substance by the members of the general assembly.
6 3 This bill relates to the taxation of the sale of metered
6 4 water to residential customers.
6 5 The bill exempts from the state sales tax the sales price
6 6 from the sale or furnishing of metered water to residential
6 7 customers for use at residential dwellings and units of
6 8 apartment and condominium complexes used for human occupancy.
6 9 By operation of Code section 423.6, an item exempt from the
6 10 imposition of the sales tax is also exempt from the use tax
6 11 imposed in Code section 423.5.
6 12 The bill creates a state excise tax on the sales price
6 13 from the sale or furnishing of metered water to residential
6 14 customers for use at residential dwellings and units of
6 15 apartment and condominium complexes used for human occupancy.
6 16 The rate of the excise tax begins at 6 percent for fiscal year
6 17 2016=2017, which is the same rate as the state sales tax, and
6 18 is reduced one percentage point each fiscal year for the next
6 19 four fiscal years until it is set at 1 percent for July 1,
6 20 2021, through December 31, 2029. The remaining 1 percent state
6 21 residential metered water tax will no longer be collected on or
6 22 after January 1, 2030, which is the same date the state sales
6 23 tax rate is reduced to 5 percent from 6 percent because of the
6 24 repeal of the 1 percent secure an advanced vision for education
6 25 tax rate.
6 26 The bill requires that a certain percentage of the state
6 27 residential metered water tax revenues collected each year be
6 28 transferred to the secure an advanced vision for education fund
6 29 created in Code section 423F.2 in order to ensure that the fund
6 30 receives an amount of revenue approximating one percentage
6 31 point of the total tax rate imposed.
6 32 The bill also creates a locally imposed residential metered
6 33 water tax of up to 1 percent that may, at the option of a county
6 34 that is not imposing a local sales and services tax on July 1,
6 35 2016, be imposed, collected, and administered by the county in
7 1 the same manner as the local sales and services tax in Code
7 2 chapter 423B if approved at election. The bill incorporates
7 3 by reference many of the provisions of Code chapter 423B.
7 4 The bill allows an election for the imposition of a local
7 5 residential metered water tax to occur at the same election
7 6 as for a local option tax authorized under Code chapter 423B
7 7 but the ballot shall state the questions so as to be voted
7 8 separately.
7 9 The bill provides that a city or county that has a local
7 10 sales and services tax in effect on July 1, 2016, is required
7 11 to impose a local residential metered water tax at the same
7 12 rate and in the same manner as the city's or county's local
7 13 sales and services tax. The city or county is required to
7 14 amend its local sales and services tax ordinance within 60 days
7 15 of the effective date of the bill to reflect the imposition of
7 16 the local residential metered water tax. The city or county
7 17 shall continue to collect the required local residential
7 18 metered water tax until the city's or county's sales and
7 19 services tax in effect on July 1, 2016, is repealed.
7 20 The director of revenue is required to administer the state
7 21 and local residential metered water tax as nearly as possible
7 22 in conjunction with the administration of the state sales
7 23 and use tax law, and to that end the bill incorporates by
7 24 reference numerous Code sections that relate to general tax
7 25 administration and the sales and use tax laws.
7 26 Revenues collected from the local option residential metered
7 27 water tax are credited to local governments in the same manner
7 28 as local option taxes under Code chapter 423B.
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