Bill Text: IA SSB3159 | 2021-2022 | 89th General Assembly | Introduced

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Bill Title: A bill for an act exempting certain leases or rentals between affiliates from the sales and use tax and from the fee for new vehicle registration, and including effective date and retroactive applicability provisions.

Spectrum: Committee Bill

Status: (Introduced - Dead) 2022-03-21 - Subcommittee Meeting: 03/22/2022 8:30AM Room 217 Conference Room. [SSB3159 Detail]

Download: Iowa-2021-SSB3159-Introduced.html

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Senate Study Bill 3159 - Introduced
SENATE FILE _____
BY (PROPOSED COMMITTEE ON
WAYS AND MEANS BILL BY
CHAIRPERSON DAWSON)
A BILL FOR
An Act exempting certain leases or rentals between affiliates
from the sales and use tax and from the fee for new vehicle
registration, and including effective date and retroactive
applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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Section 1. Section 321.105A, subsection 3, paragraph f,
Code 2022, is amended by adding the following new subparagraph:
NEW SUBPARAGRAPH . (3) (a) A vehicle leased between
affiliates, when the lessor has paid the fee imposed in
subsection 2 on the leased vehicle prior to the lease.
(b) For purposes of this subparagraph:
(i) “Affiliate” means an entity that directly or indirectly
controls, is controlled with or by, or is under common control
with another entity.
(ii) “Control” or “controlled” means any of the following:
(A) In the case of a United States corporation, the
ownership, directly or indirectly, of fifty percent or more of
the voting power to elect directors.
(B) In the case of a foreign corporation, if the voting
power to elect the directors is less than fifty percent, the
maximum amount allowed by applicable law.
(C) In the case of an entity other than a corporation, fifty
percent or more ownership interest in the entity, or the power
to direct the management of the entity.
Sec. 2. Section 423.3, Code 2022, is amended by adding the
following new subsection:
NEW SUBSECTION . 108. a. The sales price on the lease
or rental of personal property between affiliates when the
affiliate has paid a tax on the sales price imposed under this
subchapter, a use tax imposed under subchapter III, or a fee
imposed under section 321.105A on the personal property leased
or rented prior to such lease or rental.
b. For purposes of this subsection:
(1) “Affiliate” means an entity that directly or indirectly
controls, is controlled with or by, or is under common control
with another entity.
(2) “Control” or “controlled” means any of the following:
(a) In the case of a United States corporation, the
ownership, directly or indirectly, of fifty percent or more of
the voting power to elect directors.
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(b) In the case of a foreign corporation, if the voting
power to elect the directors is less than fifty percent, the
maximum amount allowed by applicable law.
(c) In the case of an entity other than a corporation, fifty
percent or more ownership interest in the entity, or the power
to direct the management of the entity.
Sec. 3. REFUNDS. Refunds of taxes, interest, or penalties
which arise from the enactment of this Act, for leases or
rentals occurring between January 1, 2015, and the effective
date of this Act, shall be limited to fifteen thousand dollars
in the aggregate for any calendar year in which claims are
eligible for a refund and shall not be allowed unless refund
claims are filed by October 1, 2022, notwithstanding any other
law to the contrary. If the amount of claims totals more than
fifteen thousand dollars in the aggregate for any calendar
year in which claims are eligible for a refund, the department
of revenue shall prorate the fifteen thousand dollars in the
aggregate among all the claimants for that particular calendar
year in relation to the amounts of the claimants’ valid claims.
Sec. 4. EFFECTIVE DATE. This Act, being deemed of immediate
importance, takes effect upon enactment.
Sec. 5. RETROACTIVE APPLICABILITY. This Act applies
retroactively to January 1, 2015, for leases or rentals
occurring on or after that date.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
This bill exempts certain leases or rentals between
affiliates from the sales and use tax and from the fee for new
vehicle registration.
The bill exempts from the fee for new registration under Code
section 321.105A(3)(a) a vehicle leased between affiliates,
when the fee for new registration imposed under Code section
321.105A(2) has been paid by the lessor prior to the lease.
The bill exempts from the sales and use tax the lease or
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rental of personal property between affiliates when a sales
tax, use tax, or fee for new registration for a vehicle has
been paid by an affiliate on the personal property leased or
rented prior to such lease or rental.
The bill requires refunds of taxes, interest, or penalties
arising from claims resulting from the enactment of the bill
for leases or rentals occurring between January 1, 2015, and
the effective date of the bill to be filed prior to October
1, 2022. Refunds of taxes, interest, or penalties shall not
exceed $15,000 in the aggregate in any calendar year in which
claims are eligible for a refund. If the amount of claims
totals more than $15,000 in the aggregate for any calendar year
in which claims are eligible for a refund, the department of
revenue shall prorate the $15,000 in the aggregate among all
the claimants for that particular calendar year.
The bill defines “affiliate” to mean an entity that directly
or indirectly controls, is controlled with or by, or is under
common control with another entity.
The bill defines “control” in most instances to mean the
ownership, directly or indirectly, of 50 percent or more of the
voting power to elect directors.
The bill takes effect upon enactment and applies
retroactively to January 1, 2015, for leases or rentals
occurring on or after that date.
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