Bill Text: IA SSB3197 | 2017-2018 | 87th General Assembly | Introduced
Bill Title: A bill for an act relating to state and local revenue and finance by modifying the individual and corporate income taxes, the franchise tax, tax credits, the moneys and credits tax, the sales and use taxes and local option sales tax, the hotel and motel excise tax, the automobile rental excise tax, the Iowa educational savings plan trust, and the disabilities expenses savings plan trust, making penalties applicable, and including immediate effective date and retroactive and other applicability provisions.
Spectrum: Committee Bill
Status: (N/A - Dead) 2018-02-22 - Subcommittee recommends passage. [SSB3197 Detail]
Download: Iowa-2017-SSB3197-Introduced.html
Senate
Study
Bill
3197
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
WAYS
AND
MEANS
BILL
BY
CHAIRPERSON
FEENSTRA)
A
BILL
FOR
An
Act
relating
to
state
and
local
revenue
and
finance
by
1
modifying
the
individual
and
corporate
income
taxes,
the
2
franchise
tax,
tax
credits,
the
moneys
and
credits
tax,
the
3
sales
and
use
taxes
and
local
option
sales
tax,
the
hotel
4
and
motel
excise
tax,
the
automobile
rental
excise
tax,
the
5
Iowa
educational
savings
plan
trust,
and
the
disabilities
6
expenses
savings
plan
trust,
making
penalties
applicable,
7
and
including
immediate
effective
date
and
retroactive
and
8
other
applicability
provisions.
9
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
10
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DIVISION
I
1
INCOME
TAX
CHANGES
FOR
TAX
YEAR
2018
2
Section
1.
EARNED
INCOME
TAX
CREDIT
FOR
2018.
3
Notwithstanding
the
definition
of
“Internal
Revenue
Code”
4
in
section
422.3,
for
tax
years
beginning
during
the
2018
5
calendar
year,
any
reference
to
the
term
“Internal
Revenue
6
Code”
in
section
422.12B
shall
mean
the
Internal
Revenue
Code
7
of
1954,
prior
to
the
date
of
its
redesignation
as
the
Internal
8
Revenue
Code
of
1986
by
the
Tax
Reform
Act
of
1986,
or
means
9
the
Internal
Revenue
Code
of
1986
as
amended
and
in
effect
on
10
January
1,
2016,
but
shall
not
be
construed
to
include
any
11
amendment
to
the
Internal
Revenue
Code
enacted
after
January
1,
12
2016,
including
any
amendment
with
retroactive
applicability
13
or
effectiveness.
14
Sec.
2.
ACCOUNTING
METHOD
AND
OTHER
MISCELLANEOUS
15
COUPLING
PROVISIONS
FOR
TAX
YEAR
2018.
Notwithstanding
any
16
other
provision
of
law
to
the
contrary,
amendments
to
the
17
Internal
Revenue
Code
enacted
in
Pub.
L.
No.
115-97,
§13102,
18
§13221,
§13504,
§13541,
§13543,
§13611,
and
§13613,
apply
in
19
calculating
federal
adjusted
gross
income
or
federal
taxable
20
income,
as
applicable,
for
state
tax
purposes
for
purposes
of
21
chapter
422
for
tax
years
beginning
during
the
2018
calendar
22
year
to
the
extent
those
amendments
affect
the
calculation
of
23
federal
adjusted
gross
income
or
federal
taxable
income,
as
24
applicable,
for
federal
tax
purposes
for
tax
years
beginning
25
during
the
2018
calendar
year.
26
Sec.
3.
TEACHER
EXPENSE
DEDUCTION.
Notwithstanding
any
27
other
provision
of
law
to
the
contrary,
for
tax
years
beginning
28
during
the
2018
calendar
year,
a
taxpayer
is
allowed
to
take
29
the
deduction
for
certain
expenses
of
elementary
and
secondary
30
school
teachers
allowed
under
section
62(a)(2)(D)
of
the
31
Internal
Revenue
Code,
as
amended
by
Pub.
L.
No.
114-113,
32
division
Q,
§104,
in
computing
net
income
for
state
tax
33
purposes.
34
Sec.
4.
EFFECTIVE
DATE.
This
division
of
this
Act,
being
35
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deemed
of
immediate
importance,
takes
effect
upon
enactment.
1
Sec.
5.
RETROACTIVE
APPLICABILITY.
This
division
of
this
2
Act
applies
retroactively
to
January
1,
2018,
for
tax
years
3
beginning
on
or
after
that
date,
but
before
January
1,
2019.
4
DIVISION
II
5
INCOME
TAX
AND
FRANCHISE
TAX
CHANGES
BEGINNING
IN
2019
6
Sec.
6.
Section
217.39,
Code
2018,
is
amended
to
read
as
7
follows:
8
217.39
Persecuted
victims
of
World
War
II
——
reparations
——
9
heirs.
10
Notwithstanding
any
other
law
of
this
state,
payments
paid
11
to
and
income
from
lost
property
of
a
victim
of
persecution
12
for
racial,
ethnic,
or
religious
reasons
by
Nazi
Germany
or
13
any
other
Axis
regime
or
as
an
heir
of
such
victim
which
is
14
exempt
from
state
income
tax
as
provided
described
in
section
15
422.7,
subsection
35
,
Code
2018,
shall
not
be
considered
as
16
income
or
an
asset
for
determining
the
eligibility
for
state
or
17
local
government
benefit
or
entitlement
programs.
The
proceeds
18
are
not
subject
to
recoupment
for
the
receipt
of
governmental
19
benefits
or
entitlements,
and
liens,
except
liens
for
child
20
support,
are
not
enforceable
against
these
sums
for
any
reason.
21
Sec.
7.
Section
422.3,
subsection
5,
Code
2018,
is
amended
22
to
read
as
follows:
23
5.
“Internal
Revenue
Code”
means
the
Internal
Revenue
Code
24
of
1954,
prior
to
the
date
of
its
redesignation
as
the
Internal
25
Revenue
Code
of
1986
by
the
Tax
Reform
Act
of
1986,
or
means
26
the
Internal
Revenue
Code
of
1986
,
as
amended
and
in
effect
27
on
January
1,
2015
.
This
definition
shall
not
be
construed
28
to
include
any
amendment
to
the
Internal
Revenue
Code
enacted
29
after
the
date
specified
in
the
preceding
sentence,
including
30
any
amendment
with
retroactive
applicability
or
effectiveness.
31
Sec.
8.
Section
422.4,
subsection
1,
paragraphs
b
and
c,
32
Code
2018,
are
amended
to
read
as
follows:
33
b.
“Cumulative
inflation
factor”
means
the
product
of
the
34
annual
inflation
factor
for
the
1988
2022
calendar
year
and
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all
annual
inflation
factors
for
subsequent
calendar
years
1
as
determined
pursuant
to
this
subsection
.
The
cumulative
2
inflation
factor
applies
to
all
tax
years
beginning
on
or
after
3
January
1
of
the
calendar
year
for
which
the
latest
annual
4
inflation
factor
has
been
determined.
5
c.
The
annual
inflation
factor
for
the
1988
2022
calendar
6
year
is
one
hundred
percent.
7
Sec.
9.
Section
422.4,
subsection
2,
Code
2018,
is
amended
8
by
striking
the
subsection.
9
Sec.
10.
Section
422.4,
subsection
16,
Code
2018,
is
amended
10
to
read
as
follows:
11
16.
The
words
“taxable
income”
mean
the
net
income
as
12
defined
in
section
422.7
minus
the
deductions
deduction
allowed
13
by
section
422.9
,
if
available,
in
the
case
of
individuals;
14
in
the
case
of
estates
or
trusts,
the
words
“taxable
income”
15
mean
the
taxable
income
(without
a
deduction
for
personal
16
exemption)
as
computed
for
federal
income
tax
purposes
under
17
the
Internal
Revenue
Code,
but
with
the
adjustments
specified
18
in
section
422.7
plus
the
Iowa
income
tax
deducted
in
computing
19
the
federal
taxable
income
and
minus
federal
income
taxes
as
20
provided
in
section
422.9
.
21
Sec.
11.
Section
422.5,
subsection
1,
paragraphs
a,
b,
c,
d,
22
and
e,
Code
2018,
are
amended
by
striking
the
paragraphs
and
23
inserting
in
lieu
thereof
the
following:
24
a.
On
all
taxable
income
from
zero
through
twelve
thousand
25
dollars
in
the
case
of
a
married
couple
filing
jointly,
or
from
26
zero
to
six
thousand
dollars
in
the
case
of
all
other
persons,
27
five
percent.
28
b.
On
all
taxable
income
exceeding
twelve
thousand
dollars
29
but
not
exceeding
thirty
thousand
dollars
in
the
case
of
a
30
married
couple
filing
jointly,
or
exceeding
six
thousand
31
dollars
but
not
exceeding
fifteen
thousand
dollars
in
the
case
32
of
all
other
persons,
five
and
one-quarter
percent.
33
c.
On
all
taxable
income
exceeding
thirty
thousand
dollars
34
but
not
exceeding
sixty
thousand
dollars
in
the
case
of
a
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married
couple
filing
jointly,
or
exceeding
fifteen
thousand
1
dollars
but
not
exceeding
thirty
thousand
dollars
in
the
case
2
of
all
other
persons,
five
and
one-half
percent.
3
d.
On
all
taxable
income
exceeding
sixty
thousand
dollars
4
but
not
exceeding
one
hundred
fifty
thousand
dollars
in
the
5
case
of
a
married
couple
filing
jointly,
or
exceeding
thirty
6
thousand
dollars
but
not
exceeding
seventy-five
thousand
7
dollars
in
the
case
of
all
other
persons,
six
percent.
8
e.
On
all
taxable
income
exceeding
one
hundred
fifty
9
thousand
dollars
in
the
case
of
a
married
couple
filing
10
jointly,
or
exceeding
seventy-five
thousand
dollars
in
the
case
11
of
all
other
persons,
the
following:
12
(1)
Six
and
six-tenths
percent
for
tax
years
beginning
13
during
the
2019
calendar
year.
14
(2)
Six
and
one-half
percent
for
tax
years
beginning
during
15
the
2020
calendar
year.
16
(3)
Six
and
four-tenths
percent
for
tax
years
beginning
17
during
the
2021
calendar
year.
18
(4)
Six
and
three-tenths
percent
for
tax
years
beginning
on
19
or
after
January
1,
2022.
20
Sec.
12.
Section
422.5,
subsection
1,
paragraphs
f,
g,
h,
21
and
i,
Code
2018,
are
amended
by
striking
the
paragraphs.
22
Sec.
13.
Section
422.5,
subsection
1,
paragraph
j,
Code
23
2018,
is
amended
to
read
as
follows:
24
j.
(1)
The
tax
imposed
upon
the
taxable
income
of
a
25
nonresident
shall
be
computed
by
reducing
the
amount
determined
26
pursuant
to
paragraphs
“a”
through
“i”
“e”
by
the
amounts
of
27
nonrefundable
credits
under
this
division
and
by
multiplying
28
this
resulting
amount
by
a
fraction
of
which
the
nonresident’s
29
net
income
allocated
to
Iowa,
as
determined
in
section
30
422.8,
subsection
2
,
paragraph
“a”
,
is
the
numerator
and
the
31
nonresident’s
total
net
income
computed
under
section
422.7
is
32
the
denominator.
This
provision
also
applies
to
individuals
33
who
are
residents
of
Iowa
for
less
than
the
entire
tax
year.
34
(2)
(a)
The
tax
imposed
upon
the
taxable
income
of
a
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resident
shareholder
in
an
S
corporation
or
of
an
estate
1
or
trust
with
a
situs
in
Iowa
that
is
a
shareholder
in
an
S
2
corporation,
which
S
corporation
has
in
effect
for
the
tax
3
year
an
election
under
subchapter
S
of
the
Internal
Revenue
4
Code
and
carries
on
business
within
and
without
the
state,
5
may
be
computed
by
reducing
the
amount
determined
pursuant
to
6
paragraphs
“a”
through
“i”
“e”
by
the
amounts
of
nonrefundable
7
credits
under
this
division
and
by
multiplying
this
resulting
8
amount
by
a
fraction
of
which
the
resident’s
or
estate’s
9
or
trust’s
net
income
allocated
to
Iowa,
as
determined
in
10
section
422.8,
subsection
2
,
paragraph
“b”
,
is
the
numerator
11
and
the
resident’s
or
estate’s
or
trust’s
total
net
income
12
computed
under
section
422.7
is
the
denominator.
If
a
resident
13
shareholder,
or
an
estate
or
trust
with
a
situs
in
Iowa
14
that
is
a
shareholder,
has
elected
to
take
advantage
of
this
15
subparagraph
(2),
and
for
the
next
tax
year
elects
not
to
take
16
advantage
of
this
subparagraph,
the
resident
or
estate
or
17
trust
shareholder
shall
not
reelect
to
take
advantage
of
this
18
subparagraph
for
the
three
tax
years
immediately
following
the
19
first
tax
year
for
which
the
shareholder
elected
not
to
take
20
advantage
of
this
subparagraph,
unless
the
director
consents
to
21
the
reelection.
This
subparagraph
also
applies
to
individuals
22
who
are
residents
of
Iowa
for
less
than
the
entire
tax
year.
23
(b)
This
subparagraph
(2)
shall
not
affect
the
amount
of
24
the
taxpayer’s
checkoffs
under
this
division
,
the
credits
from
25
tax
provided
under
this
division
,
and
the
allocation
of
these
26
credits
between
spouses
if
the
taxpayers
filed
separate
returns
27
or
separately
on
combined
returns
.
28
Sec.
14.
Section
422.5,
subsection
2,
Code
2018,
is
amended
29
by
striking
the
subsection.
30
Sec.
15.
Section
422.5,
subsections
3
and
3B,
Code
2018,
are
31
amended
to
read
as
follows:
32
3.
a.
The
tax
shall
not
be
imposed
on
a
resident
or
33
nonresident
whose
net
income,
as
defined
in
section
422.7
,
is
34
thirteen
thousand
five
hundred
dollars
or
less
in
the
case
35
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of
married
persons
filing
jointly
or
filing
separately
on
a
1
combined
return
,
heads
of
household,
and
surviving
spouses
or
2
nine
thousand
dollars
or
less
in
the
case
of
all
other
persons;
3
but
in
the
event
that
the
payment
of
tax
under
this
division
4
would
reduce
the
net
income
to
less
than
thirteen
thousand
five
5
hundred
dollars
or
nine
thousand
dollars
as
applicable,
then
6
the
tax
shall
be
reduced
to
that
amount
which
would
result
7
in
allowing
the
taxpayer
to
retain
a
net
income
of
thirteen
8
thousand
five
hundred
dollars
or
nine
thousand
dollars
as
9
applicable.
The
preceding
sentence
does
not
apply
to
estates
10
or
trusts.
For
the
purpose
of
this
subsection
,
the
entire
net
11
income,
including
any
part
of
the
net
income
not
allocated
12
to
Iowa,
shall
be
taken
into
account.
For
purposes
of
this
13
subsection
,
net
income
includes
all
amounts
of
pensions
or
14
other
retirement
income,
except
for
military
retirement
pay
15
excluded
under
section
422.7,
subsection
31A
,
paragraph
“a”
,
16
or
section
422.7,
subsection
31B
,
paragraph
“a”
,
received
from
17
any
source
which
is
not
taxable
under
this
division
as
a
result
18
of
the
government
pension
exclusions
in
section
422.7
,
or
any
19
other
state
law.
If
the
combined
net
income
of
a
husband
and
20
wife
exceeds
thirteen
thousand
five
hundred
dollars,
neither
21
of
them
shall
receive
the
benefit
of
this
subsection
,
and
it
22
is
immaterial
whether
they
file
a
joint
return
or
separate
23
returns.
However,
if
a
husband
and
wife
file
separate
returns
24
and
have
a
combined
net
income
of
thirteen
thousand
five
25
hundred
dollars
or
less,
neither
spouse
shall
receive
the
26
benefit
of
this
paragraph,
if
one
spouse
has
a
net
operating
27
loss
and
elects
to
carry
back
or
carry
forward
the
loss
as
28
provided
under
the
Internal
Revenue
Code
or
in
section
422.9
,
29
subsection
3
.
A
person
who
is
claimed
as
a
dependent
by
30
another
person
as
defined
in
section
422.12
shall
not
receive
31
the
benefit
of
this
subsection
if
the
person
claiming
the
32
dependent
has
net
income
exceeding
thirteen
thousand
five
33
hundred
dollars
or
nine
thousand
dollars
as
applicable
or
the
34
person
claiming
the
dependent
and
the
person’s
spouse
have
35
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combined
net
income
exceeding
thirteen
thousand
five
hundred
1
dollars
or
nine
thousand
dollars
as
applicable.
2
b.
In
lieu
of
the
computation
in
subsection
1
or
2
,
or
in
3
paragraph
“a”
of
this
subsection
,
if
the
married
persons’
,
4
filing
jointly
or
filing
separately
on
a
combined
return
,
5
head
of
household’s,
or
surviving
spouse’s
net
income
exceeds
6
thirteen
thousand
five
hundred
dollars,
the
regular
tax
imposed
7
under
this
division
shall
be
the
lesser
of
the
maximum
state
8
individual
income
tax
rate
for
the
tax
year
times
the
portion
9
of
the
net
income
in
excess
of
thirteen
thousand
five
hundred
10
dollars
or
the
regular
tax
liability
computed
without
regard
11
to
this
sentence.
Taxpayers
electing
to
file
separately
shall
12
compute
the
alternate
tax
described
in
this
paragraph
using
the
13
total
net
income
of
the
husband
and
wife.
The
alternate
tax
14
described
in
this
paragraph
does
not
apply
if
one
spouse
elects
15
to
carry
back
or
carry
forward
the
loss
as
provided
under
the
16
Internal
Revenue
Code
or
in
section
422.9
,
subsection
3
.
17
3B.
a.
The
tax
shall
not
be
imposed
on
a
resident
or
18
nonresident
who
is
at
least
sixty-five
years
old
on
December
19
31
of
the
tax
year
and
whose
net
income,
as
defined
in
section
20
422.7
,
is
thirty-two
thousand
dollars
or
less
in
the
case
21
of
married
persons
filing
jointly
or
filing
separately
on
a
22
combined
return
,
heads
of
household,
and
surviving
spouses
or
23
twenty-four
thousand
dollars
or
less
in
the
case
of
all
other
24
persons;
but
in
the
event
that
the
payment
of
tax
under
this
25
division
would
reduce
the
net
income
to
less
than
thirty-two
26
thousand
dollars
or
twenty-four
thousand
dollars
as
applicable,
27
then
the
tax
shall
be
reduced
to
that
amount
which
would
result
28
in
allowing
the
taxpayer
to
retain
a
net
income
of
thirty-two
29
thousand
dollars
or
twenty-four
thousand
dollars
as
applicable.
30
The
preceding
sentence
does
not
apply
to
estates
or
trusts.
31
For
the
purpose
of
this
subsection
,
the
entire
net
income,
32
including
any
part
of
the
net
income
not
allocated
to
Iowa,
33
shall
be
taken
into
account.
For
purposes
of
this
subsection
,
34
net
income
includes
all
amounts
of
pensions
or
other
retirement
35
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income,
except
for
military
retirement
pay
excluded
under
1
section
422.7,
subsection
31A
,
paragraph
“a”
,
or
section
422.7,
2
subsection
31B
,
paragraph
“a”
,
received
from
any
source
which
is
3
not
taxable
under
this
division
as
a
result
of
the
government
4
pension
exclusions
in
section
422.7
,
or
any
other
state
law.
5
If
the
combined
net
income
of
a
husband
and
wife
exceeds
6
thirty-two
thousand
dollars,
neither
of
them
shall
receive
the
7
benefit
of
this
subsection
,
and
it
is
immaterial
whether
they
8
file
a
joint
return
or
separate
returns.
However,
if
a
husband
9
and
wife
file
separate
returns
and
have
a
combined
net
income
10
of
thirty-two
thousand
dollars
or
less,
neither
spouse
shall
11
receive
the
benefit
of
this
paragraph,
if
one
spouse
has
a
net
12
operating
loss
and
elects
to
carry
back
or
carry
forward
the
13
loss
as
provided
under
the
Internal
Revenue
Code
or
in
section
14
422.9
,
subsection
3
.
A
person
who
is
claimed
as
a
dependent
by
15
another
person
as
defined
in
section
422.12
shall
not
receive
16
the
benefit
of
this
subsection
if
the
person
claiming
the
17
dependent
has
net
income
exceeding
thirty-two
thousand
dollars
18
or
twenty-four
thousand
dollars
as
applicable
or
the
person
19
claiming
the
dependent
and
the
person’s
spouse
have
combined
20
net
income
exceeding
thirty-two
thousand
dollars
or
twenty-four
21
thousand
dollars
as
applicable.
22
b.
In
lieu
of
the
computation
in
subsection
1
,
2,
or
3
,
if
23
the
married
persons’
,
filing
jointly
or
filing
separately
on
24
a
combined
return
,
head
of
household’s,
or
surviving
spouse’s
25
net
income
exceeds
thirty-two
thousand
dollars,
the
regular
tax
26
imposed
under
this
division
shall
be
the
lesser
of
the
maximum
27
state
individual
income
tax
rate
for
the
tax
year
times
the
28
portion
of
the
net
income
in
excess
of
thirty-two
thousand
29
dollars
or
the
regular
tax
liability
computed
without
regard
30
to
this
sentence.
Taxpayers
electing
to
file
separately
shall
31
compute
the
alternate
tax
described
in
this
paragraph
using
the
32
total
net
income
of
the
husband
and
wife.
The
alternate
tax
33
described
in
this
paragraph
does
not
apply
if
one
spouse
elects
34
to
carry
back
or
carry
forward
the
loss
as
provided
under
the
35
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_____
Internal
Revenue
Code
or
in
section
422.9
,
subsection
3
.
1
c.
This
subsection
applies
even
though
one
spouse
has
not
2
attained
the
age
of
sixty-five,
if
the
other
spouse
is
at
least
3
sixty-five
at
the
end
of
the
tax
year.
4
Sec.
16.
Section
422.5,
subsection
6,
Code
2018,
is
amended
5
by
striking
the
subsection
and
inserting
in
lieu
thereof
the
6
following:
7
6.
Upon
determination
of
the
latest
cumulative
inflation
8
factor,
the
director
shall
reduce
each
tax
rate
in
subsection
9
1,
paragraphs
“a”
through
“d”
,
and
paragraph
“e”
,
subparagraph
10
(4),
by
the
same
percentage
that
the
latest
cumulative
11
inflation
factor
exceeds
one
hundred
percent,
shall
round
off
12
the
resulting
rate
to
the
nearest
one-hundredth
of
one
percent,
13
and
shall
incorporate
the
result
into
the
income
tax
forms
and
14
instructions
for
each
tax
year.
15
Sec.
17.
Section
422.7,
unnumbered
paragraph
1,
Code
2018,
16
is
amended
to
read
as
follows:
17
The
term
“net
income”
means
the
adjusted
gross
income
before
18
the
net
operating
loss
deduction
taxable
income
as
properly
19
computed
for
federal
income
tax
purposes
under
section
63
the
20
Internal
Revenue
Code,
with
the
following
adjustments:
21
Sec.
18.
Section
422.7,
Code
2018,
is
amended
by
adding
the
22
following
new
subsections:
23
NEW
SUBSECTION
.
4.
Add
any
federal
net
operating
loss
24
deduction
carried
over
from
a
taxable
year
beginning
prior
to
25
January
1,
2019.
26
NEW
SUBSECTION
.
6.
a.
For
tax
years
beginning
in
the
2019
27
calendar
year,
subtract
the
amount
of
federal
income
taxes
28
paid
during
the
tax
year
to
the
extent
payment
is
for
a
tax
29
year
beginning
prior
to
January
1,
2019,
and
add
any
federal
30
income
tax
refunds
received
during
the
tax
year
to
the
extent
31
the
federal
income
tax
was
deducted
for
a
tax
year
beginning
32
prior
to
January
1,
2019.
Where
married
persons
who
have
filed
33
a
joint
federal
income
tax
return
file
separately
for
state
tax
34
purposes,
such
total
shall
be
divided
between
them
according
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to
the
portion
of
the
total
paid
by
each.
Federal
income
taxes
1
paid
for
a
tax
year
in
which
an
Iowa
return
was
not
required
to
2
be
filed
shall
not
be
subtracted.
3
b.
Notwithstanding
any
other
provision
of
law
to
the
4
contrary,
amounts
subtracted
or
added
pursuant
to
this
5
subsection
shall
not
be
included
in
the
calculation
of
net
6
income
for
purposes
of
section
422.5,
subsection
3
or
3B,
or
7
section
422.13.
8
Sec.
19.
Section
422.7,
subsection
12,
paragraph
a,
9
unnumbered
paragraph
1,
Code
2018,
is
amended
to
read
as
10
follows:
11
If
For
tax
years
beginning
prior
to
January
1,
2022,
if
the
12
adjusted
gross
federal
taxable
income
includes
income
or
loss
13
from
a
small
business
operated
by
the
taxpayer,
an
additional
14
deduction
shall
be
allowed
in
computing
the
income
or
loss
from
15
the
small
business
if
the
small
business
hired
for
employment
16
in
the
state
during
its
annual
accounting
period
ending
with
or
17
during
the
taxpayer’s
tax
year
any
of
the
following:
18
Sec.
20.
Section
422.7,
subsection
12A,
paragraph
a,
19
unnumbered
paragraph
1,
Code
2018,
is
amended
to
read
as
20
follows:
21
If
For
tax
years
beginning
prior
to
January
1,
2022,
if
the
22
adjusted
gross
federal
taxable
income
includes
income
or
loss
23
from
a
business
operated
by
the
taxpayer,
and
if
the
business
24
does
not
qualify
for
the
adjustment
under
subsection
12
,
an
25
additional
deduction
shall
be
allowed
in
computing
the
income
26
or
loss
from
the
business
if
the
business
hired
for
employment
27
in
the
state
during
its
annual
accounting
period
ending
with
or
28
during
the
taxpayer’s
tax
year
either
of
the
following:
29
Sec.
21.
Section
422.7,
subsection
13,
Code
2018,
is
amended
30
by
striking
the
subsection
and
inserting
in
lieu
thereof
the
31
following:
32
13.
Subtract,
to
the
extent
included,
the
amount
of
social
33
security
benefits
taxable
under
section
86
of
the
Internal
34
Revenue
Code.
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_____
Sec.
22.
Section
422.7,
Code
2018,
is
amended
by
adding
the
1
following
new
subsections:
2
NEW
SUBSECTION
.
18.
Add,
to
the
extent
deducted
for
federal
3
tax
purposes,
charitable
contributions
under
section
170
of
4
the
Internal
Revenue
Code
to
the
extent
such
contribution
was
5
made
to
an
organization
for
the
purpose
of
deposit
in
the
Iowa
6
education
savings
plan
trust
established
in
chapter
12D,
and
7
the
taxpayer
designated
that
any
part
of
the
contribution
be
8
used
for
the
direct
benefit
of
any
dependent
of
the
taxpayer
or
9
any
other
single
beneficiary
designated
by
the
taxpayer.
10
NEW
SUBSECTION
.
19.
a.
Subtract,
to
the
extent
included,
11
income
resulting
from
the
payment
by
an
employer
of
the
12
taxpayer,
whether
paid
to
the
taxpayer
or
to
a
lender,
of
13
principal
or
interest
on
any
qualified
education
loan
incurred
14
by
the
taxpayer.
15
b.
If
the
taxpayer
has
a
deduction
in
computing
federal
16
taxable
income
under
section
221
of
the
Internal
Revenue
Code
17
for
interest
on
a
qualified
education
loan,
the
taxpayer
shall
18
recompute
for
purposes
of
this
subsection
the
amount
of
the
19
deduction
under
paragraph
“a”
by
not
subtracting
any
amount
of
20
income
resulting
from
the
employer’s
payment
of
interest
on
a
21
qualified
education
loan
that
was
also
deducted
by
the
taxpayer
22
under
section
221
of
the
Internal
Revenue
Code.
23
c.
For
purposes
of
this
subsection,
“qualified
education
24
loan”
means
the
same
as
defined
in
section
221
of
the
Internal
25
Revenue
Code.
26
Sec.
23.
Section
422.7,
subsection
31,
Code
2018,
is
amended
27
to
read
as
follows:
28
31.
For
a
person
who
is
disabled,
or
is
fifty-five
years
of
29
age
or
older,
or
is
the
surviving
spouse
of
an
individual
or
30
a
survivor
having
an
insurable
interest
in
an
individual
who
31
would
have
qualified
for
the
exemption
under
this
subsection
32
for
the
tax
year,
subtract,
to
the
extent
included,
the
33
total
amount
of
a
governmental
or
other
pension
or
retirement
34
pay,
including,
but
not
limited
to,
defined
benefit
or
35
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defined
contribution
plans,
annuities,
individual
retirement
1
accounts,
plans
maintained
or
contributed
to
by
an
employer,
2
or
maintained
or
contributed
to
by
a
self-employed
person
as
3
an
employer,
and
deferred
compensation
plans
or
any
earnings
4
attributable
to
the
deferred
compensation
plans,
up
to
a
5
maximum
of
six
ten
thousand
dollars
for
a
person,
other
than
a
6
husband
or
wife,
who
files
a
separate
state
income
tax
return
7
and
up
to
a
maximum
of
twelve
twenty
thousand
dollars
for
a
8
husband
and
wife
who
file
a
joint
state
income
tax
return.
9
However,
a
surviving
spouse
who
is
not
disabled
or
fifty-five
10
years
of
age
or
older
can
only
exclude
the
amount
of
pension
or
11
retirement
pay
received
as
a
result
of
the
death
of
the
other
12
spouse.
A
husband
and
wife
filing
separate
state
income
tax
13
returns
or
separately
on
a
combined
state
return
are
allowed
14
a
combined
maximum
exclusion
under
this
subsection
of
up
to
15
twelve
twenty
thousand
dollars.
The
twelve
twenty
thousand
16
dollar
exclusion
shall
be
allocated
to
the
husband
or
wife
17
in
the
proportion
that
each
spouse’s
respective
pension
and
18
retirement
pay
received
bears
to
total
combined
pension
and
19
retirement
pay
received.
20
Sec.
24.
Section
422.7,
subsection
41,
Code
2018,
is
amended
21
by
adding
the
following
new
paragraph:
22
NEW
PARAGRAPH
.
0e.
Add,
to
the
extent
deducted
for
23
federal
tax
purposes,
interest,
taxes,
and
other
miscellaneous
24
expenses
to
the
extent
such
amounts
are
eligible
home
costs
25
in
connection
with
a
qualified
home
purchase
that
were
paid
26
or
reimbursed
from
funds
in
a
first-time
homebuyer
savings
27
account.
28
Sec.
25.
Section
422.7,
subsection
44,
paragraph
a,
29
unnumbered
paragraph
1,
Code
2018,
is
amended
to
read
as
30
follows:
31
If
For
tax
years
beginning
before
January
1,
2022,
if
the
32
taxpayer,
while
living,
donates
one
or
more
of
the
taxpayer’s
33
human
organs
to
another
human
being
for
immediate
human
organ
34
transplantation
during
the
tax
year,
subtract,
to
the
extent
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not
otherwise
excluded,
the
following
unreimbursed
expenses
1
incurred
by
the
taxpayer
and
related
to
the
taxpayer’s
organ
2
donation:
3
Sec.
26.
Section
422.7,
subsection
47,
Code
2018,
is
amended
4
to
read
as
follows:
5
47.
Subtract,
to
the
extent
not
otherwise
deducted
in
6
computing
adjusted
gross
federal
taxable
income,
the
amounts
7
paid
by
the
taxpayer
to
the
department
of
veterans
affairs
for
8
the
purpose
of
providing
grants
under
the
injured
veterans
9
grant
program
established
in
section
35A.14
.
Amounts
10
subtracted
under
this
subsection
shall
not
be
used
by
the
11
taxpayer
in
computing
the
amount
of
charitable
contributions
as
12
defined
by
section
170
of
the
Internal
Revenue
Code.
13
Sec.
27.
Section
422.7,
Code
2018,
is
amended
by
adding
the
14
following
new
subsection:
15
NEW
SUBSECTION
.
51.
The
additional
first-year
depreciation
16
allowance
authorized
in
section
168(k)
of
the
Internal
Revenue
17
Code
does
not
apply
in
computing
net
income
for
state
tax
18
purposes.
If
the
taxpayer
has
taken
the
additional
first-year
19
depreciation
allowance
for
purposes
of
computing
federal
20
taxable
income,
then
the
taxpayer
shall
make
the
following
21
adjustments
to
federal
taxable
income
when
computing
net
income
22
for
state
tax
purposes:
23
a.
Add
the
total
amount
of
depreciation
taken
under
section
24
168(k)
of
the
Internal
Revenue
Code
for
the
tax
year.
25
b.
Subtract
the
amount
of
depreciation
allowable
under
the
26
modified
accelerated
cost
recovery
system
described
in
section
27
168
of
the
Internal
Revenue
Code
and
calculated
without
regard
28
to
section
168(k).
29
c.
Any
other
adjustments
to
gains
or
losses
necessary
to
30
reflect
the
adjustments
made
in
paragraphs
“a”
and
“b”
.
The
31
director
shall
adopt
rules
for
the
administration
of
this
32
paragraph.
33
Sec.
28.
Section
422.7,
subsections
3,
7,
8,
9,
10,
11,
14,
34
15,
16,
20,
21,
22,
23,
24,
25,
26,
29,
30,
35,
36,
37,
39,
39A,
35
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_____
39B,
40,
43,
45,
49,
53,
55,
56,
57,
and
58,
Code
2018,
are
1
amended
by
striking
the
subsections.
2
Sec.
29.
Section
422.8,
subsection
4,
Code
2018,
is
amended
3
by
striking
the
subsection.
4
Sec.
30.
Section
422.9,
Code
2018,
is
amended
by
striking
5
the
section
and
inserting
in
lieu
thereof
the
following:
6
422.9
Iowa
net
operating
loss
incurred
prior
to
January
1,
7
2019.
8
Any
Iowa
net
operating
loss
carried
over
from
a
taxable
year
9
beginning
prior
to
January
1,
2019,
may
be
deducted
as
provided
10
in
section
422.9,
subsection
3,
Code
2018.
11
Sec.
31.
Section
422.11S,
subsection
4,
Code
2018,
is
12
amended
to
read
as
follows:
13
4.
Married
taxpayers
who
file
separate
returns
or
file
14
separately
on
a
combined
return
form
must
determine
the
tax
15
credit
under
subsection
1
based
upon
their
combined
net
income
16
and
allocate
the
total
credit
amount
to
each
spouse
in
the
17
proportion
that
each
spouse’s
respective
net
income
bears
to
18
the
total
combined
net
income.
Nonresidents
or
part-year
19
residents
of
Iowa
must
determine
their
tax
credit
in
the
ratio
20
of
their
Iowa
source
net
income
to
their
all
source
net
income.
21
Nonresidents
or
part-year
residents
who
are
married
and
elect
22
to
file
separate
returns
or
to
file
separately
on
a
combined
23
return
form
must
allocate
the
tax
credit
between
the
spouses
24
in
the
ratio
of
each
spouse’s
Iowa
source
net
income
to
the
25
combined
Iowa
source
net
income
of
the
taxpayers.
26
Sec.
32.
Section
422.12B,
subsection
2,
Code
2018,
is
27
amended
to
read
as
follows:
28
2.
Married
taxpayers
electing
to
file
separate
returns
or
29
filing
separately
on
a
combined
return
may
avail
themselves
30
of
the
earned
income
credit
by
allocating
the
earned
income
31
credit
to
each
spouse
in
the
proportion
that
each
spouse’s
32
respective
earned
income
bears
to
the
total
combined
earned
33
income.
Taxpayers
affected
by
the
allocation
provisions
of
34
section
422.8
shall
be
permitted
a
deduction
for
the
credit
35
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only
in
the
amount
fairly
and
equitably
allocable
to
Iowa
under
1
rules
prescribed
by
the
director.
2
Sec.
33.
Section
422.12C,
subsection
4,
Code
2018,
is
3
amended
to
read
as
follows:
4
4.
Married
taxpayers
who
have
filed
joint
federal
returns
5
electing
to
file
separate
returns
or
to
file
separately
on
a
6
combined
return
form
must
determine
the
child
and
dependent
7
care
credit
under
subsection
1
or
the
early
childhood
8
development
tax
credit
under
subsection
2
based
upon
their
9
combined
net
income
and
allocate
the
total
credit
amount
to
10
each
spouse
in
the
proportion
that
each
spouse’s
respective
net
11
income
bears
to
the
total
combined
net
income.
Nonresidents
12
or
part-year
residents
of
Iowa
must
determine
their
Iowa
child
13
and
dependent
care
credit
in
the
ratio
of
their
Iowa
source
14
net
income
to
their
all
source
net
income.
Nonresidents
or
15
part-year
residents
who
are
married
and
elect
to
file
separate
16
returns
or
to
file
separately
on
a
combined
return
form
must
17
allocate
the
Iowa
child
and
dependent
care
credit
between
the
18
spouses
in
the
ratio
of
each
spouse’s
Iowa
source
net
income
to
19
the
combined
Iowa
source
net
income
of
the
taxpayers.
20
Sec.
34.
Section
422.13,
subsection
1,
paragraph
c,
Code
21
2018,
is
amended
by
striking
the
paragraph.
22
Sec.
35.
Section
422.16,
subsection
1,
paragraph
f,
Code
23
2018,
is
amended
by
striking
the
paragraph.
24
Sec.
36.
Section
422.21,
subsections
2,
5,
and
7,
Code
2018,
25
are
amended
to
read
as
follows:
26
2.
An
individual
in
the
armed
forces
of
the
United
States
27
serving
in
an
area
designated
by
the
president
of
the
United
28
States
or
the
United
States
Congress
as
a
combat
zone
or
as
a
29
qualified
hazardous
duty
area,
or
deployed
outside
the
United
30
States
away
from
the
individual’s
permanent
duty
station
while
31
participating
in
an
operation
designated
by
the
United
States
32
secretary
of
defense
as
a
contingency
operation
as
defined
33
in
10
U.S.C.
§101(a)(13),
or
which
became
such
a
contingency
34
operation
by
the
operation
of
law,
or
an
individual
serving
in
35
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support
of
those
forces,
is
allowed
the
same
additional
time
1
period
after
leaving
the
combat
zone
or
the
qualified
hazardous
2
duty
area,
or
ceasing
to
participate
in
such
contingency
3
operation,
or
after
a
period
of
continuous
hospitalization,
to
4
file
a
state
income
tax
return
or
perform
other
acts
related
5
to
the
department,
as
would
constitute
timely
filing
of
the
6
return
or
timely
performance
of
other
acts
described
in
section
7
7508(a)
of
the
Internal
Revenue
Code.
An
individual
on
active
8
duty
federal
military
service
in
the
armed
forces,
armed
forces
9
military
reserve,
or
national
guard
who
is
deployed
outside
10
the
United
States
in
other
than
a
combat
zone,
qualified
11
hazardous
duty
area,
or
contingency
operation
is
allowed
the
12
same
additional
period
of
time
described
in
section
7508(a)
13
of
the
Internal
Revenue
Code
to
file
a
state
income
tax
14
return
or
perform
other
acts
related
to
the
department.
For
15
the
purposes
of
this
subsection
,
“other
acts
related
to
the
16
department”
includes
filing
claims
for
refund
for
any
tax
17
administered
by
the
department,
making
tax
payments
other
than
18
withholding
payments,
filing
appeals
on
the
tax
matters,
filing
19
other
tax
returns,
and
performing
other
acts
described
in
the
20
department’s
rules.
The
additional
time
period
allowed
applies
21
to
the
spouse
of
the
individual
described
in
this
subsection
22
to
the
extent
the
spouse
files
jointly
or
separately
on
the
23
combined
return
form
with
the
individual
or
when
the
spouse
24
is
a
party
with
the
individual
to
any
matter
for
which
the
25
additional
time
period
is
allowed.
26
5.
The
director
shall
determine
for
the
1989
2022
and
each
27
subsequent
calendar
year
the
annual
and
cumulative
inflation
28
factors
for
each
calendar
year
to
be
applied
to
tax
years
29
beginning
on
or
after
January
1
of
that
calendar
year.
The
30
director
shall
compute
the
new
dollar
amounts
tax
rates
31
as
specified
to
be
adjusted
in
section
422.5
by
the
latest
32
cumulative
inflation
factor
and
round
off
the
result
to
the
33
nearest
one
dollar
one-hundredth
of
one
percent
.
The
annual
34
and
cumulative
inflation
factors
determined
by
the
director
35
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_____
are
not
rules
as
defined
in
section
17A.2,
subsection
11
.
The
1
director
shall
determine
for
the
1990
calendar
year
and
each
2
subsequent
calendar
year
the
annual
and
cumulative
standard
3
deduction
factors
to
be
applied
to
tax
years
beginning
on
or
4
after
January
1
of
that
calendar
year.
The
director
shall
5
compute
the
new
dollar
amounts
of
the
standard
deductions
6
specified
in
section
422.9,
subsection
1
,
by
the
latest
7
cumulative
standard
deduction
factor
and
round
off
the
result
8
to
the
nearest
ten
dollars.
The
annual
and
cumulative
standard
9
deduction
factors
determined
by
the
director
are
not
rules
as
10
defined
in
section
17A.2,
subsection
11
.
11
7.
If
married
taxpayers
file
a
joint
return
or
file
12
separately
on
a
combined
return
in
accordance
with
rules
13
prescribed
by
the
director,
both
spouses
are
jointly
and
14
severally
liable
for
the
total
tax
due
on
the
return,
except
15
when
one
spouse
is
considered
to
be
an
innocent
spouse
under
16
criteria
established
pursuant
to
section
6015
of
the
Internal
17
Revenue
Code.
18
Sec.
37.
Section
422.32,
subsection
1,
paragraph
h,
Code
19
2018,
is
amended
to
read
as
follows:
20
h.
“Internal
Revenue
Code”
means
the
Internal
Revenue
Code
21
of
1954,
prior
to
the
date
of
its
redesignation
as
the
Internal
22
Revenue
Code
of
1986
by
the
Tax
Reform
Act
of
1986,
or
means
23
the
Internal
Revenue
Code
of
1986
,
as
amended
and
in
effect
24
on
January
1,
2015
.
This
definition
shall
not
be
construed
25
to
include
any
amendment
to
the
Internal
Revenue
Code
enacted
26
after
the
date
specified
in
the
preceding
sentence,
including
27
any
amendment
with
retroactive
applicability
or
effectiveness.
28
Sec.
38.
Section
422.33,
subsection
1,
paragraphs
a,
b,
c,
29
and
d,
Code
2018,
are
amended
to
read
as
follows:
30
a.
On
the
first
twenty-five
thousand
dollars
of
taxable
31
income,
or
any
part
thereof,
the
rate
of
six
percent
for
tax
32
years
beginning
prior
to
January
1,
2021,
and
the
rate
of
33
five
and
one-half
percent
for
tax
years
beginning
on
or
after
34
January
1,
2021
.
35
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_____
b.
On
taxable
income
between
twenty-five
thousand
dollars
1
and
one
hundred
thousand
dollars
or
any
part
thereof,
the
rate
2
of
eight
percent
for
tax
years
beginning
prior
to
January
1,
3
2021,
and
the
rate
of
five
and
one-half
percent
for
tax
years
4
beginning
on
or
after
January
1,
2021
.
5
c.
On
taxable
income
between
one
hundred
thousand
dollars
6
and
two
hundred
fifty
thousand
dollars
or
any
part
thereof,
the
7
rate
of
ten
percent
for
tax
years
beginning
prior
to
January
1,
8
2020,
the
rate
of
eight
percent
for
tax
years
beginning
during
9
the
2020
calendar
year,
and
the
rate
of
five
and
one-half
10
percent
for
tax
years
beginning
on
or
after
January
1,
2021
.
11
d.
On
taxable
income
of
two
hundred
fifty
thousand
dollars
12
or
more,
the
rate
of
twelve
ten
percent
for
tax
years
beginning
13
on
or
after
January
1,
2019,
but
prior
to
January
1,
2021,
the
14
rate
of
eight
percent
for
tax
years
beginning
during
the
2021
15
calendar
year,
and
the
rate
of
seven
percent
for
tax
years
16
beginning
on
or
after
January
1,
2022
.
17
Sec.
39.
Section
422.33,
subsection
4,
Code
2018,
is
amended
18
by
striking
the
subsection.
19
Sec.
40.
Section
422.35,
unnumbered
paragraph
1,
Code
2018,
20
is
amended
to
read
as
follows:
21
The
term
“net
income”
means
the
taxable
income
before
the
22
net
operating
loss
deduction,
as
properly
computed
for
federal
23
income
tax
purposes
under
the
Internal
Revenue
Code,
with
the
24
following
adjustments:
25
Sec.
41.
Section
422.35,
subsection
4,
Code
2018,
is
amended
26
to
read
as
follows:
27
4.
Subtract
fifty
percent
of
the
federal
income
taxes
paid
28
or
accrued,
as
the
case
may
be,
during
the
tax
year
to
the
29
extent
payment
is
for
a
tax
year
beginning
prior
to
January
1,
30
2019
,
adjusted
by
any
federal
income
tax
refunds
;
and
add
the
31
Iowa
income
tax
deducted
in
computing
said
taxable
income
to
32
the
extent
the
tax
was
deducted
for
a
tax
year
beginning
prior
33
to
January
1,
2019
.
34
Sec.
42.
Section
422.35,
subsection
6,
paragraph
a,
35
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_____
unnumbered
paragraph
1,
Code
2018,
is
amended
to
read
as
1
follows:
2
If
For
tax
years
beginning
before
January
1,
2022,
if
the
3
taxpayer
is
a
small
business
corporation,
subtract
an
amount
4
equal
to
sixty-five
percent
of
the
wages
paid
to
individuals,
5
but
not
to
exceed
twenty
thousand
dollars
per
individual,
named
6
in
subparagraphs
(1),
(2),
and
(3)
who
were
hired
for
the
first
7
time
by
the
taxpayer
during
the
tax
year
for
work
done
in
this
8
state:
9
Sec.
43.
Section
422.35,
subsection
6A,
paragraph
a,
10
unnumbered
paragraph
1,
Code
2018,
is
amended
to
read
as
11
follows:
12
If
For
tax
years
beginning
prior
to
January
1,
2022,
if
the
13
taxpayer
is
a
business
corporation
and
does
not
qualify
for
14
the
adjustment
under
subsection
6
,
subtract
an
amount
equal
to
15
sixty-five
percent
of
the
wages
paid
to
individuals,
but
shall
16
not
exceed
twenty
thousand
dollars
per
individual,
named
in
17
subparagraphs
(1)
and
(2)
who
were
hired
for
the
first
time
by
18
the
taxpayer
during
the
tax
year
for
work
done
in
this
state:
19
Sec.
44.
Section
422.35,
subsection
11,
Code
2018,
is
20
amended
by
striking
the
subsection
and
inserting
in
lieu
21
thereof
the
following:
22
11.
a.
Add
any
federal
net
operating
loss
deduction
carried
23
over
from
a
taxable
year
beginning
prior
to
January
1,
2019.
24
b.
Any
Iowa
net
operating
loss
carried
over
from
a
taxable
25
year
beginning
prior
to
January
1,
2019,
may
be
deducted
as
26
provided
in
section
422.35,
subsection
11,
Code
2018.
27
Sec.
45.
Section
422.35,
Code
2018,
is
amended
by
adding
the
28
following
new
subsection:
29
NEW
SUBSECTION
.
23.
The
additional
first-year
depreciation
30
allowance
authorized
in
section
168(k)
of
the
Internal
Revenue
31
Code
does
not
apply
in
computing
net
income
for
state
tax
32
purposes.
If
the
taxpayer
has
taken
the
additional
first-year
33
depreciation
allowance
for
purposes
of
computing
federal
34
taxable
income,
then
the
taxpayer
shall
make
the
following
35
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adjustments
to
federal
taxable
income
when
computing
net
income
1
for
state
tax
purposes:
2
a.
Add
the
total
amount
of
depreciation
taken
under
section
3
168(k)
of
the
Internal
Revenue
Code
for
the
tax
year.
4
b.
Subtract
the
amount
of
depreciation
allowable
under
the
5
modified
accelerated
cost
recovery
system
described
in
section
6
168
of
the
Internal
Revenue
Code
and
calculated
without
regard
7
to
section
168(k).
8
c.
Any
other
adjustments
to
gains
or
losses
necessary
to
9
reflect
the
adjustments
made
in
paragraphs
“a”
and
“b”
.
The
10
director
shall
adopt
rules
for
the
administration
of
this
11
paragraph.
12
Sec.
46.
Section
422.35,
subsections
3,
5,
7,
8,
10,
16,
13
17,
18,
19,
19A,
19B,
20,
22,
and
24,
Code
2018,
are
amended
by
14
striking
the
subsections.
15
Sec.
47.
Section
541B.3,
subsection
1,
paragraph
b,
Code
16
2018,
is
amended
to
read
as
follows:
17
b.
A
married
couple
electing
to
file
a
joint
Iowa
individual
18
income
tax
return
may
establish
a
joint
first-time
homebuyer
19
savings
account.
Married
taxpayers
electing
to
file
separate
20
tax
returns
or
separately
on
a
combined
tax
return
for
Iowa
tax
21
purposes
shall
not
establish
or
maintain
a
joint
first-time
22
homebuyer
savings
account.
23
Sec.
48.
Section
541B.6,
Code
2018,
is
amended
to
read
as
24
follows:
25
541B.6
Tax
considerations.
26
The
state
income
tax
treatment
of
a
first-time
homebuyer
27
savings
account
shall
be
as
provided
in
section
422.7,
28
subsection
41
,
and
section
422.9,
subsection
2
,
paragraph
“k”
.
29
Sec.
49.
EFFECTIVE
DATE.
This
division
of
this
Act
takes
30
effect
January
1,
2019.
31
Sec.
50.
APPLICABILITY.
This
division
of
this
Act
applies
32
to
tax
years
beginning
on
or
after
January
1,
2019.
33
DIVISION
III
34
TAX
CREDITS
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Sec.
51.
Section
8.57E,
subsection
2,
Code
2018,
is
amended
1
to
read
as
follows:
2
2.
Moneys
in
the
taxpayers
trust
fund
shall
only
be
used
3
pursuant
to
appropriations
or
transfers
made
by
the
general
4
assembly
for
tax
relief.
During
each
fiscal
year
beginning
on
5
or
after
July
1,
2014,
but
before
June
30,
2020,
in
which
the
6
balance
of
the
taxpayers
trust
fund
equals
or
exceeds
thirty
7
million
dollars,
there
is
transferred
from
the
taxpayers
trust
8
fund
to
the
Iowa
taxpayers
trust
fund
tax
credit
fund
created
9
in
section
422.11E
,
the
entire
balance
of
the
taxpayers
trust
10
fund
to
be
used
for
the
Iowa
taxpayers
trust
fund
tax
credit
in
11
accordance
with
section
422.11E,
subsection
5
.
12
Sec.
52.
Section
15.119,
subsection
2,
paragraph
a,
Code
13
2018,
is
amended
by
striking
the
paragraph
and
inserting
in
14
lieu
thereof
the
following:
15
a.
The
high
quality
jobs
program
administered
pursuant
16
to
sections
15.326
through
15.336.
In
allocating
tax
17
credits
pursuant
to
this
subsection,
the
authority
shall
not
18
allocate
more
than
eighty
million
dollars
for
purposes
of
this
19
paragraph.
20
Sec.
53.
Section
15.119,
subsection
2,
paragraphs
d,
e,
and
21
g,
Code
2018,
are
amended
to
read
as
follows:
22
d.
The
tax
credits
for
investments
in
qualifying
businesses
23
issued
pursuant
to
section
15E.43
.
In
allocating
tax
credits
24
pursuant
to
this
subsection
,
the
authority
shall
not
allocate
25
two
more
than
four
million
dollars
for
purposes
of
this
26
paragraph
,
unless
the
authority
determines
that
the
tax
credits
27
awarded
will
be
less
than
that
amount
.
28
e.
The
tax
credits
for
investments
in
an
innovation
fund
29
pursuant
to
section
15E.52
.
In
allocating
tax
credits
pursuant
30
to
this
subsection
in
a
fiscal
year
in
which
the
allocation
for
31
purposes
of
paragraph
“d”
does
not
exceed
two
million
dollars
,
32
the
authority
shall
not
allocate
more
than
eight
million
33
dollars
for
purposes
of
this
paragraph
,
unless
the
authority
34
determines
that
the
tax
credits
awarded
will
be
less
than
that
35
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_____
amount
.
In
allocating
tax
credits
pursuant
to
this
subsection
1
in
a
fiscal
year
in
which
the
allocation
for
purposes
of
2
paragraph
“d”
exceeds
two
million
dollars,
the
authority
shall
3
not
allocate
for
purposes
of
this
paragraph
an
amount
that
4
exceeds
an
amount
equal
to
the
difference
of
eight
million
5
dollars
less
the
amount
that
the
allocation
for
purposes
of
6
paragraph
“d”
exceeds
two
million
dollars
for
the
same
fiscal
7
year.
8
g.
The
workforce
housing
tax
incentives
program
administered
9
pursuant
to
sections
15.351
through
15.356
.
In
allocating
10
tax
credits
pursuant
to
this
subsection
,
the
authority
shall
11
not
allocate
more
than
twenty
twenty-two
million
dollars
for
12
purposes
of
this
paragraph.
Of
the
moneys
allocated
under
this
13
paragraph,
five
seven
million
dollars
shall
be
reserved
for
14
allocation
to
qualified
housing
projects
in
small
cities,
as
15
defined
in
section
15.352
,
that
are
registered
on
or
after
July
16
1,
2017.
17
Sec.
54.
Section
15.329,
subsection
1,
paragraph
f,
Code
18
2018,
is
amended
to
read
as
follows:
19
f.
The
business
shall
not
be
a
retail
business
or
a
business
20
where
entrance
is
limited
by
a
cover
charge
or
membership
21
requirement
,
or
a
web
search
portal
business
as
defined
in
22
section
423.3,
subsection
93,
or
a
data
center
business
as
23
defined
in
section
423.3,
subsection
95,
unless
such
web
search
24
portal
business
or
data
center
business
had
a
physical
presence
25
in
this
state
prior
to
July
1,
2018
.
26
Sec.
55.
Section
15.331A,
subsection
1,
Code
2018,
is
27
amended
to
read
as
follows:
28
1.
The
eligible
business
shall
be
entitled
to
a
refund
29
of
the
sales
and
use
taxes
paid
under
chapter
423
for
gas,
30
electricity,
water,
or
sewer
utility
services,
goods,
wares,
or
31
merchandise,
or
on
services
rendered,
furnished,
or
performed
32
to
or
for
a
contractor
or
subcontractor
and
used
in
the
33
fulfillment
of
a
written
contract
relating
to
the
construction
34
or
equipping
of
a
facility
that
is
part
of
a
project
of
the
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eligible
business.
Taxes
attributable
to
intangible
property
1
and
furniture
and
furnishings
shall
not
be
refunded.
However,
2
an
eligible
business
shall
be
entitled
to
a
refund
for
taxes
3
attributable
to
racks,
shelving,
and
conveyor
equipment
to
be
4
used
in
a
warehouse
or
distribution
center
subject
to
section
5
15.331C
.
6
Sec.
56.
Section
15.331C,
Code
2018,
is
amended
to
read
as
7
follows:
8
15.331C
Corporate
tax
credit
for
certain
sales
taxes
paid
by
9
third-party
developer.
10
1.
An
eligible
business
may
claim
a
corporate
tax
credit
11
in
an
amount
equal
to
the
sales
and
use
taxes
paid
by
a
12
third-party
developer
under
chapter
423
for
gas,
electricity,
13
water,
or
sewer
utility
services,
goods,
wares,
or
merchandise,
14
or
on
services
rendered,
furnished,
or
performed
to
or
for
a
15
contractor
or
subcontractor
and
used
in
the
fulfillment
of
a
16
written
contract
relating
to
the
construction
or
equipping
of
17
a
facility
of
the
eligible
business.
Taxes
attributable
to
18
intangible
property
and
furniture
and
furnishings
shall
not
19
be
included
,
but
taxes
attributable
to
racks,
shelving,
and
20
conveyor
equipment
to
be
used
in
a
warehouse
or
distribution
21
center
shall
be
included
.
Any
credit
in
excess
of
the
tax
22
liability
for
the
tax
year
may
be
credited
to
the
tax
liability
23
for
the
following
seven
years
or
until
depleted,
whichever
24
occurs
earlier.
An
eligible
business
may
elect
to
receive
a
25
refund
of
all
or
a
portion
of
an
unused
tax
credit.
26
2.
A
third-party
developer
shall
state
under
oath,
on
27
forms
provided
by
the
department
of
revenue,
the
amount
of
28
taxes
paid
as
described
in
subsection
1
and
shall
submit
such
29
forms
to
the
department
of
revenue.
The
taxes
paid
shall
be
30
itemized
to
allow
identification
of
the
taxes
attributable
31
to
racks,
shelving,
and
conveyor
equipment
to
be
used
in
a
32
warehouse
or
distribution
center.
After
receiving
the
form
33
from
the
third-party
developer,
the
department
of
revenue
shall
34
issue
a
tax
credit
certificate
to
the
eligible
business
equal
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to
the
sales
and
use
taxes
paid
by
a
third-party
developer
1
under
chapter
423
for
gas,
electricity,
water,
or
sewer
2
utility
services,
goods,
wares,
or
merchandise,
or
on
services
3
rendered,
furnished,
or
performed
to
or
for
a
contractor
or
4
subcontractor
and
used
in
the
fulfillment
of
a
written
contract
5
relating
to
the
construction
or
equipping
of
a
facility.
6
The
department
of
revenue
shall
also
issue
a
tax
credit
7
certificate
to
the
eligible
business
equal
to
the
taxes
paid
8
and
attributable
to
racks,
shelving,
and
conveyor
equipment
to
9
be
used
in
a
warehouse
or
distribution
center.
The
aggregate
10
combined
total
amount
of
tax
refunds
under
section
15.331A
for
11
taxes
attributable
to
racks,
shelving,
and
conveyor
equipment
12
to
be
used
in
a
warehouse
or
distribution
center
and
of
tax
13
credit
certificates
issued
by
the
department
of
revenue
for
the
14
taxes
paid
and
attributable
to
racks,
shelving,
and
conveyor
15
equipment
to
be
used
in
a
warehouse
or
distribution
center
16
shall
not
exceed
five
hundred
thousand
dollars
in
a
fiscal
17
year.
If
an
applicant
for
a
tax
credit
certificate
does
not
18
receive
a
certificate
for
the
taxes
paid
and
attributable
19
to
racks,
shelving,
and
conveyor
equipment
to
be
used
in
a
20
warehouse
or
distribution
center,
the
application
shall
be
21
considered
in
succeeding
fiscal
years.
The
eligible
business
22
shall
not
claim
a
tax
credit
under
this
section
unless
a
tax
23
credit
certificate
issued
by
the
department
of
revenue
is
24
included
with
the
taxpayer’s
tax
return
for
the
tax
year
for
25
which
the
tax
credit
is
claimed.
A
tax
credit
certificate
26
shall
contain
the
eligible
business’s
name,
address,
tax
27
identification
number,
the
amount
of
the
tax
credit,
and
other
28
information
deemed
necessary
by
the
department
of
revenue.
29
Sec.
57.
Section
15.335,
subsection
7,
paragraph
b,
Code
30
2018,
is
amended
by
striking
the
paragraph
and
inserting
in
31
lieu
thereof
the
following:
32
b.
For
purposes
of
this
section,
“Internal
Revenue
Code”
33
means
the
same
as
defined
in
section
422.3.
34
Sec.
58.
Section
15.335,
subsection
8,
Code
2018,
is
amended
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by
striking
the
subsection
and
inserting
in
lieu
thereof
the
1
following:
2
8.
Any
tax
credit
in
excess
of
the
taxpayer’s
liability
for
3
the
tax
year
is
not
refundable
and
may
not
be
credited
to
the
4
tax
liability
for
any
other
year.
5
Sec.
59.
Section
16.80,
subsection
5,
paragraphs
a
and
b,
6
Code
2018,
are
amended
to
read
as
follows:
7
a.
Except
as
provided
in
paragraph
“b”
,
the
tax
credit
shall
8
equal
five
seven
percent
of
the
amount
paid
to
the
taxpayer
9
under
the
agreement.
10
b.
The
tax
credit
shall
equal
fifteen
seventeen
percent
11
of
the
amount
paid
to
the
taxpayer
from
crops
or
animals
sold
12
under
an
agreement
in
which
the
payment
is
exclusively
made
13
from
the
sale
of
crops
or
animals.
14
Sec.
60.
Section
16.80,
subsection
10,
Code
2018,
is
amended
15
to
read
as
follows:
16
10.
The
amount
of
tax
credit
certificates
that
may
be
issued
17
pursuant
to
this
section
shall
not
exceed
six
eight
million
18
dollars
in
any
fiscal
year.
The
authority
shall
issue
the
tax
19
credit
certificates
on
a
first-come,
first-served
basis.
20
Sec.
61.
NEW
SECTION
.
260G.8
Future
repeal.
21
This
chapter
is
repealed
effective
July
1,
2025.
22
Sec.
62.
Section
403.19A,
subsection
3,
paragraph
c,
23
subparagraph
(2),
Code
2018,
is
amended
to
read
as
follows:
24
(2)
The
pilot
project
city
and
the
economic
development
25
authority
shall
not
enter
into
a
withholding
agreement
after
26
June
30,
2018
2019
.
27
Sec.
63.
Section
404A.4,
subsection
1,
paragraph
a,
Code
28
2018,
is
amended
to
read
as
follows:
29
a.
Except
as
provided
in
subsections
2
and
3
,
the
authority
30
shall
not
award
in
any
one
fiscal
year
an
amount
of
tax
credits
31
provided
in
section
404A.2
in
excess
of
forty-five
thirty-five
32
million
dollars.
33
Sec.
64.
Section
404A.4,
subsections
2
and
3,
Code
2018,
are
34
amended
by
striking
the
subsections.
35
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Sec.
65.
NEW
SECTION
.
404A.7
Future
repeal.
1
This
chapter
is
repealed
effective
July
1,
2025.
2
Sec.
66.
Section
422.10,
subsection
1,
Code
2018,
is
amended
3
by
adding
the
following
new
paragraph:
4
NEW
PARAGRAPH
.
0a.
An
individual
shall
only
be
eligible
for
5
the
credit
provided
in
this
section
if
the
business
conducting
6
the
research
meets
all
of
the
following
requirements:
7
(1)
(a)
The
business
is
engaged
in
the
manufacturing,
8
life
sciences,
software
engineering,
or
aviation
and
aerospace
9
industry.
10
(b)
A
person
who
is
engaged
in
agricultural
production
11
as
defined
in
section
423.1,
or
who
is
a
contractor,
12
subcontractor,
builder,
or
a
contractor-retailer
that
engages
13
in
commercial
and
residential
repair
and
installation,
14
including
but
not
limited
to
heating
or
cooling
installation
15
and
repair,
plumbing
and
pipe
fitting,
security
system
16
installation,
or
electrical
installation
and
repair,
does
not
17
qualify
under
subparagraph
division
(a)
and
is
not
eligible
18
for
the
credit.
For
purposes
of
this
subparagraph
division,
19
“contractor-retailer”
means
a
business
that
makes
frequent
20
retail
sales
to
the
public
or
to
other
contractors
and
that
21
also
engages
in
the
performance
of
construction
contracts.
22
(2)
The
business
claims
and
is
allowed
a
research
credit
23
for
such
qualified
research
expenses
under
section
41
of
the
24
Internal
Revenue
Code
for
the
same
taxable
year
as
it
is
25
claiming
the
credit
provided
in
this
section.
26
Sec.
67.
Section
422.10,
subsection
3,
Code
2018,
is
amended
27
by
adding
the
following
new
paragraph:
28
NEW
PARAGRAPH
.
0a.
For
purposes
of
this
section,
“base
29
amount”
means
the
product
of
the
fixed-based
percentage
times
30
the
average
annual
gross
receipts
of
the
taxpayer
for
the
four
31
taxable
years
preceding
the
taxable
year
for
which
the
credit
32
is
being
determined,
but
in
no
event
shall
the
base
amount
be
33
less
than
fifty
percent
of
the
qualified
research
expenses
for
34
the
credit
year.
35
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Sec.
68.
Section
422.10,
subsection
3,
paragraph
a,
Code
1
2018,
is
amended
to
read
as
follows:
2
a.
For
purposes
of
this
section
,
“base
amount”
,
“basic
3
research
payment”
,
and
“qualified
research
expense”
mean
the
4
same
as
defined
for
the
federal
credit
for
increasing
research
5
activities
under
section
41
of
the
Internal
Revenue
Code,
6
except
that
for
the
alternative
simplified
credit
such
amounts
7
are
for
research
conducted
within
this
state.
8
Sec.
69.
Section
422.10,
subsection
3,
paragraph
b,
Code
9
2018,
is
amended
by
striking
the
paragraph.
10
Sec.
70.
Section
422.11B,
Code
2018,
is
amended
to
read
as
11
follows:
12
422.11B
Minimum
tax
credit.
13
1.
a.
There
For
tax
years
beginning
before
January
1,
2020,
14
there
is
allowed
as
a
credit
against
the
tax
determined
in
15
section
422.5,
subsection
1
,
paragraphs
“a”
through
“j”
for
a
16
tax
year
an
amount
equal
to
the
minimum
tax
credit
for
that
tax
17
year.
18
b.
The
minimum
tax
credit
for
a
tax
year
is
the
excess,
if
19
any,
of
the
net
minimum
tax
imposed
for
all
prior
tax
years
20
beginning
on
or
after
January
1,
1987,
but
before
January
1,
21
2019,
over
the
amount
allowable
as
a
credit
under
this
section
22
for
those
prior
tax
years.
23
2.
a.
The
allowable
credit
under
subsection
1
for
a
24
tax
year
beginning
before
January
1,
2019,
shall
not
exceed
25
the
excess,
if
any,
of
the
tax
determined
in
section
422.5,
26
subsection
1
,
paragraphs
“a”
through
“j”
over
the
state
27
alternative
minimum
tax
as
determined
in
section
422.5,
28
subsection
2
,
Code
2018
.
The
allowable
credit
under
subsection
29
1
for
a
tax
year
beginning
in
the
2019
calendar
year
shall
not
30
exceed
the
tax
determined
under
section
422.5,
subsection
1.
31
b.
The
net
minimum
tax
for
a
tax
year
is
the
excess,
if
32
any,
of
the
tax
determined
in
section
422.5,
subsection
2
,
33
Code
2018,
for
the
tax
year
over
the
tax
determined
in
section
34
422.5,
subsection
1
,
paragraphs
“a”
through
“j”
for
the
tax
35
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year.
1
3.
This
section
is
repealed
January
1,
2020,
for
tax
years
2
beginning
on
or
after
January
1,
2020.
3
Sec.
71.
Section
422.11E,
Code
2018,
is
amended
by
adding
4
the
following
new
subsection:
5
NEW
SUBSECTION
.
6.
This
section
is
repealed
on
January
1,
6
2020.
7
Sec.
72.
Section
422.11S,
subsection
6,
paragraph
a,
Code
8
2018,
is
amended
to
read
as
follows:
9
a.
“Eligible
student”
means
a
student
who
is
a
member
of
a
10
household
whose
total
annual
income
during
the
calendar
year
11
before
the
student
receives
a
tuition
grant
for
purposes
of
12
this
section
does
not
exceed
an
amount
equal
to
three
four
13
times
the
most
recently
published
federal
poverty
guidelines
in
14
the
federal
register
by
the
United
States
department
of
health
15
and
human
services.
16
Sec.
73.
Section
422.11S,
subsection
8,
paragraph
a,
17
subparagraph
(2),
Code
2018,
is
amended
to
read
as
follows:
18
(2)
“Total
approved
tax
credits”
means
for
the
tax
year
19
beginning
in
the
2006
calendar
year,
two
million
five
hundred
20
thousand
dollars,
for
the
tax
year
beginning
in
the
2007
21
calendar
year,
five
million
dollars,
for
tax
years
beginning
22
on
or
after
January
1,
2008,
but
before
January
1,
2012,
seven
23
million
five
hundred
thousand
dollars,
for
tax
years
beginning
24
on
or
after
January
1,
2012,
but
before
January
1,
2014,
eight
25
million
seven
hundred
fifty
thousand
dollars,
and
for
tax
years
26
beginning
on
or
after
January
1,
2014,
but
before
January
1,
27
2019,
twelve
million
dollars
,
and
for
tax
years
beginning
on
or
28
after
January
1,
2019,
thirteen
million
dollars
.
29
Sec.
74.
Section
422.12,
subsection
2,
paragraph
b,
Code
30
2018,
is
amended
to
read
as
follows:
31
b.
A
For
tax
years
beginning
before
January
1,
2022,
a
32
tuition
credit
equal
to
twenty-five
percent
of
the
first
one
33
thousand
dollars
which
the
taxpayer
has
paid
to
others
for
each
34
dependent
in
grades
kindergarten
through
twelve,
for
tuition
35
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and
textbooks
of
each
dependent
in
attending
an
elementary
or
1
secondary
school
situated
in
Iowa,
which
school
is
accredited
2
or
approved
under
section
256.11
,
which
is
not
operated
for
3
profit,
and
which
adheres
to
the
provisions
of
the
federal
4
Civil
Rights
Act
of
1964
and
chapter
216
.
Notwithstanding
5
any
other
provision,
all
other
credits
allowed
under
this
6
subsection
shall
be
deducted
before
the
tuition
credit
under
7
this
paragraph.
The
department,
when
conducting
an
audit
of
8
a
taxpayer’s
return,
shall
also
audit
the
tuition
tax
credit
9
portion
of
the
tax
return.
10
Sec.
75.
Section
422.12,
subsection
2,
paragraph
c,
11
subparagraph
(1),
Code
2018,
is
amended
to
read
as
follows:
12
(1)
A
For
tax
years
beginning
before
January
1,
2022,
13
a
volunteer
fire
fighter
and
volunteer
emergency
medical
14
services
personnel
member
credit
equal
to
one
hundred
dollars
15
to
compensate
the
taxpayer
for
the
voluntary
services
if
the
16
volunteer
served
for
the
entire
tax
year.
A
taxpayer
who
17
is
a
paid
employee
of
an
emergency
medical
services
program
18
or
a
fire
department
and
who
is
also
a
volunteer
emergency
19
medical
services
personnel
member
or
volunteer
fire
fighter
in
20
a
city,
county,
or
area
governed
by
an
agreement
pursuant
to
21
chapter
28E
where
the
emergency
medical
services
program
or
22
fire
department
performs
services,
shall
qualify
for
the
credit
23
provided
under
this
paragraph
“c”
.
24
Sec.
76.
Section
422.12,
subsection
2,
paragraph
d,
25
subparagraph
(1),
Code
2018,
is
amended
to
read
as
follows:
26
(1)
A
For
tax
years
beginning
before
January
1,
2022,
a
27
reserve
peace
officer
credit
equal
to
one
hundred
dollars
to
28
compensate
the
taxpayer
for
services
as
a
reserve
peace
officer
29
if
the
reserve
peace
officer
served
for
the
entire
tax
year.
30
Sec.
77.
Section
422.33,
subsection
5,
Code
2018,
is
amended
31
by
adding
the
following
new
paragraph:
32
NEW
PARAGRAPH
.
0e.
A
corporation
shall
only
be
33
eligible
for
the
credit
provided
in
this
subsection
if
the
34
business
conducting
the
research
meets
all
of
the
following
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requirements:
1
(1)
(a)
The
business
is
engaged
in
the
manufacturing,
2
life
sciences,
software
engineering,
or
aviation
and
aerospace
3
industry.
4
(b)
A
person
who
is
engaged
in
agricultural
production
5
as
defined
in
section
423.1,
or
who
is
a
contractor,
6
subcontractor,
builder,
or
a
contractor-retailer
that
engages
7
in
commercial
and
residential
repair
and
installation,
8
including
but
not
limited
to
heating
or
cooling
installation
9
and
repair,
plumbing
and
pipe
fitting,
security
system
10
installation,
or
electrical
installation
and
repair,
does
not
11
qualify
under
subparagraph
division
(a)
and
is
not
eligible
12
for
the
credit.
For
purposes
of
this
subparagraph
division,
13
“contractor-retailer”
means
a
business
that
makes
frequent
14
retail
sales
to
the
public
or
to
other
contractors
and
that
15
also
engages
in
the
performance
of
construction
contracts.
16
(2)
The
business
claims
and
is
allowed
a
research
credit
17
for
such
qualified
research
expenses
under
section
41
of
the
18
Internal
Revenue
Code
for
the
same
taxable
year
as
it
is
19
claiming
the
credit
provided
in
this
subsection.
20
Sec.
78.
Section
422.33,
subsection
5,
paragraph
e,
Code
21
2018,
is
amended
by
adding
the
following
new
subparagraph:
22
NEW
SUBPARAGRAPH
.
(01)
For
purposes
of
this
section,
“base
23
amount”
means
the
product
of
the
fixed-based
percentage
times
24
the
average
annual
gross
receipts
of
the
taxpayer
for
the
four
25
taxable
years
preceding
the
taxable
year
for
which
the
credit
26
is
being
determined,
but
in
no
event
shall
the
base
amount
be
27
less
than
fifty
percent
of
the
qualified
research
expenses
for
28
the
credit
year.
29
Sec.
79.
Section
422.33,
subsection
5,
paragraph
e,
30
subparagraph
(1),
Code
2018,
is
amended
to
read
as
follows:
31
(1)
For
purposes
of
this
subsection
,
“base
amount”
,
“basic
32
research
payment”
,
and
“qualified
research
expense”
mean
the
33
same
as
defined
for
the
federal
credit
for
increasing
research
34
activities
under
section
41
of
the
Internal
Revenue
Code,
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except
that
for
the
alternative
simplified
credit
such
amounts
1
are
for
research
conducted
within
this
state.
2
Sec.
80.
Section
422.33,
subsection
5,
paragraph
e,
3
subparagraph
(2),
Code
2018,
is
amended
by
striking
the
4
subparagraph.
5
Sec.
81.
Section
422.33,
subsection
7,
Code
2018,
is
amended
6
to
read
as
follows:
7
7.
a.
(1)
There
For
tax
years
beginning
before
January
1,
8
2020,
there
is
allowed
as
a
credit
against
the
tax
determined
9
in
subsection
1
for
a
tax
year
an
amount
equal
to
the
minimum
10
tax
credit
for
that
tax
year.
11
(2)
The
minimum
tax
credit
for
a
tax
year
is
the
excess,
12
if
any,
of
the
net
minimum
tax
imposed
for
all
prior
tax
years
13
beginning
on
or
after
January
1,
1987,
but
before
January
14
1,
2019,
over
the
amount
allowable
as
a
credit
under
this
15
subsection
for
those
prior
tax
years.
16
b.
(1)
The
allowable
credit
under
paragraph
“a”
for
a
tax
17
year
beginning
before
January
1,
2019,
shall
not
exceed
the
18
excess,
if
any,
of
the
tax
determined
in
subsection
1
over
19
the
state
alternative
minimum
tax
as
determined
in
subsection
20
4
.
The
allowable
credit
under
paragraph
“a”
for
a
tax
year
21
beginning
in
the
2019
calendar
year
shall
not
exceed
the
tax
22
determined
in
subsection
1.
23
(2)
The
net
minimum
tax
for
a
tax
year
is
the
excess,
if
24
any,
of
the
tax
determined
in
subsection
4
for
the
tax
year
25
over
the
tax
determined
in
subsection
1
for
the
tax
year.
26
c.
This
subsection
is
repealed
January
1,
2020,
for
tax
27
years
beginning
on
or
after
January
1,
2020.
28
Sec.
82.
2018
INTERIM
TAX
CREDIT
STUDY.
The
legislative
tax
29
expenditure
committee
created
in
section
2.45
shall
study
all
30
tax
credits
available
under
Iowa
law
during
the
2018
interim.
31
The
study
shall
comprehensively
review
and
evaluate
each
tax
32
credit
to
assess
its
cost,
equity,
simplicity,
competitiveness,
33
public
purpose,
adequacy,
effectiveness,
and
the
extent
of
34
conformance
with
the
original
purpose
of
the
tax
credit.
The
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legislative
tax
expenditure
committee
shall
also
consider
1
new
or
different
tax
credits
or
other
incentive
programs
2
for
economic
development
that
will
improve
predictability,
3
flexibility,
and
utilization,
and
put
Iowa
in
the
best
position
4
for
attracting
and
retaining
business
in
the
future.
The
5
legislative
tax
expenditure
committee
shall
submit
its
findings
6
and
recommendations
to
the
general
assembly
for
consideration
7
during
the
2019
legislative
session.
8
Sec.
83.
FUTURE
REPEAL.
Sections
15.326,
15.327,
15.329,
9
15.330,
15.330A,
15.331A,
15.331C,
15.332,
15.333,
15.333A,
10
15.335,
15.335A,
15.335B,
15.335C,
and
15.336,
Code
2018,
are
11
repealed
effective
July
1,
2025.
12
Sec.
84.
REPEAL.
Sections
422.10A,
422.11I,
and
422.11N,
13
Code
2018,
are
repealed.
14
Sec.
85.
REPEAL.
Section
422.11L,
Code
2018,
is
repealed.
15
Sec.
86.
REPEAL.
Chapter
190B,
Code
2018,
is
repealed.
16
Sec.
87.
EFFECTIVE
DATE
AND
APPLICABILITY.
17
1.
Except
as
provided
in
subsections
2
through
11,
this
18
division
of
this
Act
takes
effect
January
1,
2019,
and
applies
19
to
tax
years
beginning
on
or
after
that
date.
20
2.
The
section
of
this
division
of
this
Act
repealing
21
section
422.11L,
takes
effect
July
1,
2018,
and
applies
to
22
solar
energy
system
installations
occurring
on
or
after
that
23
date.
24
3.
The
section
of
this
division
of
this
Act
striking
and
25
replacing
section
15.119,
subsection
2,
paragraph
“a”,
takes
26
effect
July
1,
2018.
27
4.
The
section
of
this
division
of
this
Act
amending
section
28
15.119,
subsection
2,
paragraphs
“d”,
“e”,
and
“g”,
takes
29
effect
July
1,
2018.
30
5.
The
sections
of
this
division
of
this
Act
amending
31
section
404A.4
take
effect
July
1,
2018.
32
6.
The
section
of
this
division
of
this
Act
amending
section
33
16.80,
subsection
10,
takes
effect
July
1,
2018.
34
7.
The
sections
of
this
division
of
this
Act
enacting
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S.F.
_____
section
422.10,
subsection
1,
paragraph
“0a”,
and
enacting
1
section
422.33,
subsection
5,
paragraph
“0e”,
being
deemed
of
2
immediate
importance,
take
effect
upon
enactment,
and
apply
3
retroactively
to
January
1,
2018,
for
tax
years
beginning
on
or
4
after
that
date
and
for
tax
returns,
including
amended
returns,
5
filed
on
or
after
that
date
for
any
tax
year.
6
8.
The
sections
of
this
division
of
this
Act
amending
7
section
422.10,
subsection
3,
paragraph
“a”,
and
section
8
422.33,
subsection
5,
paragraph
“e”,
subparagraph
(1),
and
9
enacting
section
422.10,
subsection
3,
paragraph
“0a”,
and
10
section
422.33,
subsection
5,
paragraph
“e”,
subparagraph
11
(01),
being
deemed
of
immediate
importance,
take
effect
upon
12
enactment,
and
apply
retroactively
to
January
1,
2010,
for
tax
13
years
beginning
on
or
after
that
date.
14
9.
The
section
of
this
division
of
this
Act
amending
section
15
15.329,
subsection
1,
paragraph
“f”,
takes
effect
July
1,
2018.
16
10.
The
section
of
this
division
of
this
Act
amending
17
section
403.19A,
subsection
3,
paragraph
“c”,
subparagraph
(2),
18
takes
effect
July
1,
2018.
19
11.
The
section
of
this
division
of
this
Act
establishing
20
a
2018
interim
tax
credit
study
by
the
legislative
tax
21
expenditure
committee
takes
effect
July
1,
2018.
22
DIVISION
IV
23
FRANCHISE
TAX
AND
MONEYS
AND
CREDITS
TAX
24
Sec.
88.
Section
15.293A,
subsection
1,
paragraph
a,
Code
25
2018,
is
amended
to
read
as
follows:
26
a.
A
redevelopment
tax
credit
shall
be
allowed
against
27
the
taxes
imposed
in
chapter
422,
divisions
II,
III,
and
V
,
28
and
in
chapter
432
,
and
against
the
moneys
and
credits
tax
29
imposed
in
section
533.329
,
for
a
portion
of
a
taxpayer’s
30
equity
investment,
as
provided
in
subsection
3
,
in
a
qualifying
31
redevelopment
project.
32
Sec.
89.
Section
15.293A,
subsection
2,
paragraphs
c
and
f,
33
Code
2018,
are
amended
to
read
as
follows:
34
c.
The
tax
credit
certificate,
unless
rescinded
by
the
35
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130
S.F.
_____
authority,
shall
be
accepted
by
the
department
of
revenue
as
1
payment
for
taxes
imposed
pursuant
to
chapter
422,
divisions
2
II,
III,
and
V
,
and
in
chapter
432
,
and
for
the
moneys
and
3
credits
tax
imposed
in
section
533.329
,
subject
to
any
4
conditions
or
restrictions
placed
by
the
authority
upon
5
the
face
of
the
tax
credit
certificate
and
subject
to
the
6
limitations
of
this
section
.
7
f.
A
tax
credit
shall
not
be
claimed
by
a
transferee
8
under
this
section
until
a
replacement
tax
credit
certificate
9
identifying
the
transferee
as
the
proper
holder
has
been
10
issued.
The
transferee
may
use
the
amount
of
the
tax
credit
11
transferred
against
the
taxes
imposed
in
chapter
422,
divisions
12
II,
III,
and
V
,
and
in
chapter
432
,
and
against
the
moneys
and
13
credits
tax
imposed
in
section
533.329
,
for
any
tax
year
the
14
original
transferor
could
have
claimed
the
tax
credit.
Any
15
consideration
received
for
the
transfer
of
the
tax
credit
shall
16
not
be
included
as
income
under
chapter
422,
divisions
II,
III,
17
and
V
.
Any
consideration
paid
for
the
transfer
of
the
tax
18
credit
shall
not
be
deducted
from
income
under
chapter
422,
19
divisions
II,
III,
and
V
.
20
Sec.
90.
Section
15.333,
subsection
1,
Code
2018,
is
amended
21
to
read
as
follows:
22
1.
An
eligible
business
may
claim
a
tax
credit
equal
to
a
23
percentage
of
the
new
investment
directly
related
to
new
jobs
24
created
or
retained
by
the
project.
The
tax
credit
shall
be
25
amortized
equally
over
five
calendar
years.
The
tax
credit
26
shall
be
allowed
against
taxes
imposed
under
chapter
422,
27
division
II,
III,
or
V
,
and
against
the
moneys
and
credits
tax
28
imposed
in
section
533.329
.
If
the
business
is
a
partnership,
29
S
corporation,
limited
liability
company,
cooperative
organized
30
under
chapter
501
and
filing
as
a
partnership
for
federal
tax
31
purposes,
or
estate
or
trust
electing
to
have
the
income
taxed
32
directly
to
the
individual,
an
individual
may
claim
the
tax
33
credit
allowed.
The
amount
claimed
by
the
individual
shall
34
be
based
upon
the
pro
rata
share
of
the
individual’s
earnings
35
-34-
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5452XC
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130
S.F.
_____
of
the
partnership,
S
corporation,
limited
liability
company,
1
cooperative
organized
under
chapter
501
and
filing
as
a
2
partnership
for
federal
tax
purposes,
or
estate
or
trust.
The
3
percentage
shall
be
determined
as
provided
in
section
15.335A
.
4
Any
tax
credit
in
excess
of
the
tax
liability
for
the
tax
year
5
may
be
credited
to
the
tax
liability
for
the
following
seven
6
years
or
until
depleted,
whichever
occurs
first.
7
Sec.
91.
Section
15.355,
subsection
3,
paragraph
b,
Code
8
2018,
is
amended
to
read
as
follows:
9
b.
The
tax
credit
shall
be
allowed
against
the
taxes
imposed
10
in
chapter
422,
divisions
II,
III,
and
V
,
and
in
chapter
432
,
11
and
against
the
moneys
and
credits
tax
imposed
in
section
12
533.329
.
13
Sec.
92.
Section
15.355,
subsection
3,
paragraph
e,
14
subparagraphs
(3)
and
(6),
Code
2018,
are
amended
to
read
as
15
follows:
16
(3)
The
tax
credit
certificate,
unless
rescinded
by
the
17
authority,
shall
be
accepted
by
the
department
of
revenue
as
18
payment
for
taxes
imposed
pursuant
to
chapter
422,
divisions
19
II,
III,
and
V
,
and
in
chapter
432
,
and
for
the
moneys
and
20
credits
tax
imposed
in
section
533.329
,
subject
to
any
21
conditions
or
restrictions
placed
by
the
authority
upon
22
the
face
of
the
tax
credit
certificate
and
subject
to
the
23
limitations
of
this
program.
24
(6)
A
tax
credit
shall
not
be
claimed
by
a
transferee
25
under
this
section
until
a
replacement
tax
credit
certificate
26
identifying
the
transferee
as
the
proper
holder
has
been
27
issued.
The
transferee
may
use
the
amount
of
the
tax
credit
28
transferred
against
the
taxes
imposed
in
chapter
422,
divisions
29
II,
III,
and
V
,
and
in
chapter
432
,
and
against
the
moneys
and
30
credits
tax
imposed
in
section
533.329
,
for
any
tax
year
the
31
original
transferor
could
have
claimed
the
tax
credit.
Any
32
consideration
received
for
the
transfer
of
the
tax
credit
shall
33
not
be
included
as
income
under
chapter
422,
divisions
II,
34
III,
and
V
.
Any
consideration
paid
for
the
transfer
of
the
tax
35
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5452XC
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87
mm/jh
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130
S.F.
_____
credit
shall
not
be
deducted
from
income
under
chapter
422,
1
divisions
II,
III,
and
V
.
2
Sec.
93.
Section
15E.43,
subsection
1,
paragraphs
a
and
d,
3
Code
2018,
are
amended
to
read
as
follows:
4
a.
For
tax
years
beginning
on
or
after
January
1,
2015,
5
a
tax
credit
shall
be
allowed
against
the
taxes
imposed
in
6
chapter
422,
divisions
II,
III,
and
V
,
and
in
chapter
432
,
and
7
against
the
moneys
and
credits
tax
imposed
in
section
533.329
,
8
for
a
portion
of
a
taxpayer’s
equity
investment,
as
provided
in
9
subsection
2
,
in
a
qualifying
business.
10
d.
For
a
tax
credit
claimed
against
the
taxes
imposed
in
11
chapter
422,
division
II
,
any
tax
credit
in
excess
of
the
12
tax
liability
is
refundable.
In
lieu
of
claiming
a
refund,
13
the
taxpayer
may
elect
to
have
the
overpayment
shown
on
14
the
taxpayer’s
final,
completed
return
credited
to
the
tax
15
liability
for
the
following
tax
year.
For
a
tax
credit
claimed
16
against
the
taxes
imposed
in
chapter
422,
divisions
III
and
17
V
,
and
in
chapter
432
,
and
against
the
moneys
and
credits
tax
18
imposed
in
section
533.329
,
any
tax
credit
in
excess
of
the
19
taxpayer’s
liability
for
the
tax
year
may
be
credited
to
the
20
tax
liability
for
the
following
three
years
or
until
depleted,
21
whichever
is
earlier.
A
tax
credit
shall
not
be
carried
back
22
to
a
tax
year
prior
to
the
tax
year
in
which
the
taxpayer
23
redeems
the
tax
credit.
24
Sec.
94.
Section
15E.44,
subsection
4,
Code
2018,
is
amended
25
to
read
as
follows:
26
4.
After
verifying
the
eligibility
of
a
qualifying
27
business,
the
authority
shall
issue
a
tax
credit
certificate
28
to
be
included
with
the
equity
investor’s
tax
return.
The
tax
29
credit
certificate
shall
contain
the
taxpayer’s
name,
address,
30
tax
identification
number,
the
amount
of
credit,
the
name
of
31
the
qualifying
business,
and
other
information
required
by
the
32
department
of
revenue.
The
tax
credit
certificate,
unless
33
rescinded
by
the
authority,
shall
be
accepted
by
the
department
34
of
revenue
as
payment
for
taxes
imposed
pursuant
to
chapter
35
-36-
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87
mm/jh
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130
S.F.
_____
422,
divisions
II,
III,
and
V
,
and
in
chapter
432
,
and
for
the
1
moneys
and
credits
tax
imposed
in
section
533.329
,
subject
to
2
any
conditions
or
restrictions
placed
by
the
authority
upon
3
the
face
of
the
tax
credit
certificate
and
subject
to
the
4
limitations
of
section
15E.43
.
5
Sec.
95.
Section
15E.52,
subsection
2,
paragraph
a,
Code
6
2018,
is
amended
to
read
as
follows:
7
a.
A
tax
credit
shall
be
allowed
against
the
taxes
imposed
8
in
chapter
422,
divisions
II,
III,
and
V
,
and
in
chapter
432
,
9
and
against
the
moneys
and
credits
tax
imposed
in
section
10
533.329
,
for
a
portion
of
a
taxpayer’s
equity
investment
in
the
11
form
of
cash
in
an
innovation
fund.
12
Sec.
96.
Section
15E.52,
subsection
13,
Code
2018,
is
13
amended
to
read
as
follows:
14
13.
The
transferee
may
use
the
amount
of
the
tax
credit
15
transferred
against
the
taxes
imposed
in
chapter
422,
divisions
16
II,
III,
and
V
,
and
in
chapter
432
,
and
against
the
moneys
and
17
credits
tax
imposed
in
section
533.329
,
for
any
tax
year
the
18
original
transferor
could
have
claimed
the
tax
credit.
Any
19
consideration
received
for
the
transfer
of
the
tax
credit
shall
20
not
be
included
as
income
under
chapter
422,
divisions
II,
III,
21
and
V
.
Any
consideration
paid
for
the
transfer
of
the
tax
22
credit
shall
not
be
deducted
from
income
under
chapter
422,
23
divisions
II,
III,
and
V
.
24
Sec.
97.
Section
15E.62,
subsection
8,
Code
2018,
is
amended
25
to
read
as
follows:
26
8.
“Tax
credit”
means
a
contingent
tax
credit
issued
27
pursuant
to
section
15E.66
that
is
available
against
tax
28
liabilities
imposed
by
chapter
422,
divisions
II,
III,
and
29
V
,
and
by
chapter
432
and
against
the
moneys
and
credits
tax
30
imposed
by
section
533.329
.
31
Sec.
98.
Section
15E.305,
subsection
1,
Code
2018,
is
32
amended
to
read
as
follows:
33
1.
For
tax
years
beginning
on
or
after
January
1,
2003,
34
a
tax
credit
shall
be
allowed
against
the
taxes
imposed
in
35
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5452XC
(3)
87
mm/jh
37/
130
S.F.
_____
chapter
422,
divisions
II,
III,
and
V
,
and
in
chapter
432
,
and
1
against
the
moneys
and
credits
tax
imposed
in
section
533.329
2
equal
to
twenty-five
percent
of
a
taxpayer’s
endowment
gift
to
3
an
endow
Iowa
qualified
community
foundation.
An
individual
4
may
claim
a
tax
credit
under
this
section
of
a
partnership,
5
limited
liability
company,
S
corporation,
estate,
or
trust
6
electing
to
have
income
taxed
directly
to
the
individual.
The
7
amount
claimed
by
the
individual
shall
be
based
upon
the
pro
8
rata
share
of
the
individual’s
earnings
from
the
partnership,
9
limited
liability
company,
S
corporation,
estate,
or
trust.
A
10
tax
credit
shall
be
allowed
only
for
an
endowment
gift
made
to
11
an
endow
Iowa
qualified
community
foundation
for
a
permanent
12
endowment
fund
established
to
benefit
a
charitable
cause
in
13
this
state.
The
amount
of
the
endowment
gift
for
which
the
14
tax
credit
is
claimed
shall
not
be
deductible
in
determining
15
taxable
income
for
state
income
tax
purposes.
Any
tax
credit
16
in
excess
of
the
taxpayer’s
tax
liability
for
the
tax
year
may
17
be
credited
to
the
tax
liability
for
the
following
five
years
18
or
until
depleted,
whichever
occurs
first.
A
tax
credit
shall
19
not
be
carried
back
to
a
tax
year
prior
to
the
tax
year
in
which
20
the
taxpayer
claims
the
tax
credit.
21
Sec.
99.
Section
331.427,
subsection
1,
unnumbered
22
paragraph
1,
Code
2018,
is
amended
to
read
as
follows:
23
Except
as
otherwise
provided
by
state
law,
county
revenues
24
from
taxes
and
other
sources
for
general
county
services
shall
25
be
credited
to
the
general
fund
of
the
county,
including
26
revenues
received
under
sections
9I.11
,
101A.3
,
101A.7
,
123.36
,
27
123.143
,
142D.9
,
176A.8
,
321.105
,
321.152
,
321G.7
,
321I.8
,
28
section
331.554,
subsection
6
,
sections
341A.20
,
364.3
,
368.21
,
29
423A.7
,
428A.8
,
433.15
,
434.19
,
445.57
,
453A.35
,
458A.21
,
30
483A.12
,
533.329
,
556B.1
,
583.6
,
602.8108
,
904.908
,
and
906.17
,
31
and
the
following:
32
Sec.
100.
Section
422.60,
subsection
2,
paragraph
a,
Code
33
2018,
is
amended
to
read
as
follows:
34
a.
In
addition
to
all
taxes
imposed
under
this
division
,
35
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87
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130
S.F.
_____
there
is
imposed
upon
each
financial
institution
doing
business
1
within
the
state
and
that
is
not
exempt
from
the
federal
income
2
tax,
the
greater
of
the
tax
determined
in
section
422.63
or
3
the
state
alternative
minimum
tax
equal
to
sixty
percent
of
4
the
maximum
state
franchise
tax
rate,
rounded
to
the
nearest
5
one-tenth
of
one
percent,
of
the
state
alternative
minimum
6
taxable
income
of
the
taxpayer
computed
under
this
subsection
.
7
Sec.
101.
Section
422.60,
subsection
3,
paragraph
a,
8
subparagraph
(1),
Code
2018,
is
amended
to
read
as
follows:
9
(1)
There
For
a
financial
institution
that
is
not
exempt
10
from
the
federal
income
tax,
there
is
allowed
as
a
credit
11
against
the
tax
determined
in
section
422.63
for
a
tax
year
an
12
amount
equal
to
the
minimum
tax
credit
for
that
tax
year.
13
Sec.
102.
Section
422.61,
subsections
1,
3,
and
4,
Code
14
2018,
are
amended
to
read
as
follows:
15
1.
“Financial
institution”
means
a
state
bank
as
defined
16
in
section
524.103,
subsection
41
,
a
state
bank
chartered
17
under
the
laws
of
any
other
state,
a
national
banking
18
association,
a
trust
company,
a
federally
chartered
savings
19
and
loan
association,
an
out-of-state
state
chartered
savings
20
bank,
a
credit
union
as
defined
in
section
533.102
that
is
21
incorporated
or
organized
under
chapter
533
or
under
the
laws
22
of
another
state,
a
financial
institution
chartered
by
the
23
federal
home
loan
bank
board,
a
non-Iowa
chartered
savings
and
24
loan
association,
or
a
production
credit
association
,
or
an
25
agricultural
credit
association
that
is
a
member
of
the
farm
26
credit
system
under
the
federal
Farm
Credit
Act,
12
U.S.C.
ch.
27
23,
as
amended
.
28
3.
a.
“Net
income”
means
one
of
the
following:
29
(1)
For
a
financial
institution
that
is
exempt
from
the
30
federal
income
tax,
the
total
revenue
less
total
expenses
as
31
properly
reported
on
the
financial
institution’s
internal
32
revenue
service
form
990
covering
the
same
period,
with
the
33
adjustments
in
paragraph
“b”
to
the
extent
the
taxes,
income,
34
and
deductions
described
in
such
adjustments
are
applicable
35
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to
the
financial
institution’s
calculation
of
revenues
and
1
expenses
as
determined
by
the
director
by
rule.
2
(2)
For
any
other
financial
institution,
the
net
income
of
3
the
financial
institution
computed
in
accordance
with
section
4
422.35
,
with
the
following
adjustments
:
in
paragraph
“b”
.
5
b.
Applicable
adjustments
in
computing
“net
income”
:
6
a.
(1)
Federal
income
taxes
paid
or
accrued
shall
not
be
7
subtracted.
8
b.
(2)
Notwithstanding
section
422.35,
subsection
2
,
or
9
any
other
provisions
of
law,
income
from
obligations
of
the
10
state
and
its
political
subdivisions
and
franchise
taxes
paid
11
or
accrued
under
this
division
during
the
taxable
year
shall
12
be
added.
Income
from
sales
of
obligations
of
the
state
and
13
its
political
subdivisions
and
interest
and
dividend
income
14
from
these
obligations
are
exempt
from
the
taxes
imposed
by
15
this
division
only
if
the
law
authorizing
the
obligations
16
specifically
exempts
the
income
from
the
sale
and
interest
and
17
dividend
income
from
the
state
franchise
tax.
18
c.
(3)
Interest
and
dividends
from
federal
securities
shall
19
not
be
subtracted.
20
d.
(4)
Interest
and
dividends
derived
from
obligations
of
21
United
States
possessions,
agencies,
and
instrumentalities,
22
including
bonds
which
were
purchased
after
January
1,
1991,
and
23
issued
by
the
governments
of
Puerto
Rico,
Guam,
and
the
Virgin
24
Islands
shall
be
added,
to
the
extent
they
were
not
included
in
25
computing
federal
taxable
income.
26
e.
(5)
A
deduction
disallowed
under
section
265(b)
or
27
section
291(e)(1)(B)
of
the
Internal
Revenue
Code
shall
be
28
subtracted.
29
f.
(6)
A
deduction
shall
not
be
allowed
for
that
portion
of
30
the
taxpayer’s
expenses
computed
under
this
paragraph
which
is
31
allocable
to
an
investment
in
an
investment
subsidiary.
The
32
portion
of
the
taxpayer’s
expenses
which
is
allocable
to
an
33
investment
in
an
investment
subsidiary
is
an
amount
which
bears
34
the
same
ratio
to
the
taxpayer’s
expenses
as
the
taxpayer’s
35
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average
adjusted
basis,
as
computed
pursuant
to
section
1016
1
of
the
Internal
Revenue
Code,
of
investment
in
that
investment
2
subsidiary
bears
to
the
average
adjusted
basis
for
all
assets
3
of
the
taxpayer.
The
portion
of
the
taxpayer’s
expenses
that
4
is
computed
and
disallowed
under
this
paragraph
shall
be
added.
5
g.
(7)
Where
a
financial
institution
as
defined
in
section
6
581
of
the
Internal
Revenue
Code
is
not
subject
to
income
tax
7
and
the
shareholders
of
the
financial
institution
are
taxed
on
8
the
financial
institution’s
income
under
the
provisions
of
the
9
Internal
Revenue
Code,
such
tax
treatment
shall
be
disregarded
10
and
the
financial
institution
shall
compute
its
net
income
for
11
franchise
tax
purposes
in
the
same
manner
under
this
subsection
12
as
a
financial
institution
that
is
subject
to
or
liable
for
13
federal
income
tax
under
the
Internal
Revenue
Code
in
effect
14
for
the
applicable
year.
15
4.
“Taxable
year”
means
the
calendar
year
or
the
fiscal
year
16
ending
during
a
calendar
year,
for
which
the
tax
is
payable.
17
“Fiscal
year”
includes
a
tax
period
of
less
than
twelve
months
18
if,
under
the
Internal
Revenue
Code,
a
corporation
is
required
19
to
file
a
tax
return
or
internal
revenue
service
form
990
20
covering
a
tax
period
of
less
than
twelve
months.
21
Sec.
103.
Section
422.62,
Code
2018,
is
amended
to
read
as
22
follows:
23
422.62
Due
and
delinquent
dates.
24
The
franchise
tax
is
due
and
payable
on
the
first
day
25
following
the
end
of
the
taxable
year
of
each
financial
26
institution,
and
for
a
financial
institution
that
is
exempt
27
from
the
federal
income
tax,
the
franchise
tax
is
delinquent
28
after
the
last
day
of
the
fifth
month
following
the
due
date.
29
For
all
other
financial
institutions,
the
franchise
tax
is
30
delinquent
after
the
last
day
of
the
fourth
month
following
the
31
due
date
or
forty-five
days
after
the
due
date
of
the
federal
32
tax
return,
excluding
extensions
of
time
to
file,
whichever
is
33
the
later.
Every
financial
institution
shall
file
a
return
as
34
prescribed
by
the
director
on
or
before
the
delinquency
date.
35
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Sec.
104.
Section
422.63,
Code
2018,
is
amended
to
read
as
1
follows:
2
422.63
Amount
of
tax.
3
1.
The
franchise
tax
is
imposed
annually
in
an
amount
equal
4
to
five
percent
of
computed
by
applying
the
following
rates
5
of
taxation
to
the
net
income
received
or
accrued
during
the
6
taxable
year
:
7
a.
On
net
income
from
zero
to
seven
million
five
hundred
8
thousand
dollars,
two
percent
.
9
b.
On
net
income
exceeding
seven
million
five
hundred
10
thousand
dollars,
four
percent.
11
2.
If
the
net
income
of
the
financial
institution
is
derived
12
from
its
business
carried
on
entirely
within
the
state,
the
tax
13
in
subsection
1
shall
be
imposed
on
the
entire
net
income,
but
14
if
the
business
is
carried
on
partly
within
and
partly
without
15
the
state,
the
tax
in
subsection
1
shall
be
imposed
on
the
16
portion
of
net
income
reasonably
attributable
to
the
business
17
within
the
state
,
which
net
income
shall
be
specifically
18
allocated
or
equitably
apportioned
within
and
without
the
state
19
under
rules
of
the
director.
20
Sec.
105.
REPEAL.
Section
533.329,
Code
2018,
is
repealed.
21
Sec.
106.
PRESERVATION
OF
EXISTING
RIGHTS.
This
division
22
of
this
Act
is
not
intended
and
shall
not
limit,
modify,
23
or
otherwise
adversely
affect
any
tax
credit
or
tax
credit
24
certificate
issued,
awarded,
or
allowed
before
January
1,
2019,
25
nor
shall
it
limit,
modify,
or
otherwise
adversely
affect
26
a
taxpayer’s
right
to
claim
or
redeem
a
tax
credit
issued,
27
awarded,
or
allowed
before
January
1,
2019,
including
but
not
28
limited
to
any
tax
credit
carryforward
amount.
Any
amount
of
29
tax
credit
that
would
have
been
eligible
to
be
claimed
by
a
30
taxpayer
on
or
after
January
1,
2019,
against
the
moneys
and
31
credits
tax
imposed
in
section
533.329,
Code
2018,
shall
be
32
allowed
in
the
same
manner
and
to
the
same
extent
as
a
credit
33
against
the
franchise
tax
imposed
in
chapter
422,
division
V.
34
Sec.
107.
EFFECTIVE
DATE.
This
division
of
this
Act
takes
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effect
January
1,
2019.
1
Sec.
108.
APPLICABILITY.
This
division
of
this
Act
applies
2
to
tax
years
beginning
on
or
after
January
1,
2019.
3
DIVISION
V
4
CHANGES
TO
IOWA
EDUCATIONAL
SAVINGS
PLAN
TRUST
AND
IOWA
ABLE
5
SAVINGS
PLAN
TRUST
6
Sec.
109.
Section
12D.1,
Code
2018,
is
amended
to
read
as
7
follows:
8
12D.1
Purpose
and
definitions.
9
1.
The
general
assembly
finds
that
the
general
welfare
and
10
well-being
of
the
state
are
directly
related
to
educational
11
levels
and
skills
of
the
citizens
of
the
state,
and
that
a
12
vital
and
valid
public
purpose
is
served
by
the
creation
and
13
implementation
of
programs
which
encourage
and
make
possible
14
the
attainment
of
higher
formal
education
by
the
greatest
15
number
of
citizens
of
the
state.
The
state
has
limited
16
resources
to
provide
additional
programs
for
higher
education
17
funding
and
the
continued
operation
and
maintenance
of
the
18
state’s
public
institutions
of
higher
education
and
the
general
19
welfare
of
the
citizens
of
the
state
will
be
enhanced
by
20
establishing
a
program
which
allows
citizens
of
the
state
to
21
invest
money
in
a
public
trust
for
future
application
to
the
22
payment
of
higher
education
costs
qualified
education
expenses
.
23
The
creation
of
the
means
of
encouragement
for
citizens
to
24
invest
in
such
a
program
represents
the
carrying
out
of
a
25
vital
and
valid
public
purpose.
In
order
to
make
available
26
to
the
citizens
of
the
state
an
opportunity
to
fund
future
27
higher
formal
education
needs,
it
is
necessary
that
a
public
28
trust
be
established
in
which
moneys
may
be
invested
for
future
29
educational
use.
30
2.
As
used
in
this
chapter
,
unless
the
context
otherwise
31
requires:
32
a.
“Account
balance
limit”
means
the
maximum
allowable
33
aggregate
balance
of
accounts
established
for
the
same
34
beneficiary.
Account
earnings,
if
any,
are
included
in
the
35
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account
balance
limit.
1
b.
“Administrative
fund”
means
the
administrative
fund
2
established
under
section
12D.4
.
3
c.
“Beneficiary”
means
the
individual
designated
by
a
4
participation
agreement
to
benefit
from
advance
payments
of
5
higher
education
costs
qualified
education
expenses
on
behalf
6
of
the
beneficiary.
7
d.
“Benefits”
means
the
payment
of
higher
education
costs
8
qualified
education
expenses
on
behalf
of
a
beneficiary
by
the
9
trust
during
the
beneficiary’s
attendance
at
an
institution
of
10
higher
education
a
qualified
educational
institution
.
11
e.
“Higher
education
costs”
means
the
same
as
“qualified
12
higher
education
expenses”
as
defined
in
section
529(e)(3)
of
13
the
Internal
Revenue
Code
.
14
f.
e.
“Institution
of
higher
education”
means
an
institution
15
described
in
section
481
of
the
federal
Higher
Education
Act
of
16
1965,
20
U.S.C.
§1088,
which
is
eligible
to
participate
in
the
17
United
States
department
of
education’s
student
aid
programs.
18
g.
f.
“Internal
Revenue
Code”
means
the
same
as
defined
19
in
section
12I.1
.
20
h.
g.
“Iowa
educational
savings
plan
trust”
or
“trust”
means
21
the
trust
created
under
section
12D.2
.
22
i.
h.
“Participant”
means
an
individual,
individual’s
legal
23
representative,
trust,
estate,
or
an
organization
described
24
in
section
501(c)(3)
of
the
Internal
Revenue
Code
and
exempt
25
from
taxation
under
section
501(a)
of
the
Internal
Revenue
26
Code,
that
has
entered
into
a
participation
agreement
under
27
this
chapter
for
the
advance
payment
of
higher
education
costs
28
qualified
education
expenses
on
behalf
of
a
beneficiary.
29
j.
i.
“Participation
agreement”
means
an
agreement
between
30
a
participant
and
the
trust
entered
into
under
this
chapter
.
31
k.
j.
“Program
fund”
means
the
program
fund
established
32
under
section
12D.4
.
33
k.
“Qualified
education
expenses”
means
the
same
as
34
“qualified
higher
education
expenses”
as
defined
in
section
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529(e)(3)
of
the
Internal
Revenue
Code,
as
amended
by
Pub.
L.
1
No.
115-97,
and
shall
include
elementary
and
secondary
school
2
expenses
for
tuition
described
in
section
529(c)(7)
of
the
3
Internal
Revenue
Code,
subject
to
the
limitations
imposed
by
4
section
529(e)(3)(A)
of
the
Internal
Revenue
Code.
5
l.
“Qualified
educational
institution”
means
an
institution
6
of
higher
education,
or
any
elementary
or
secondary
public,
7
private,
or
religious
school
described
in
section
529(c)(7)
of
8
the
Internal
Revenue
Code.
9
l.
m.
“Tuition
and
fees”
“Tuition”
means
the
quarter
,
or
10
semester
,
or
annual
charges
imposed
to
attend
an
institution
11
of
higher
education
a
qualified
educational
institution
and
12
required
as
a
condition
of
enrollment
or
attendance
.
13
Sec.
110.
Section
12D.2,
subsections
2,
5,
9,
and
14,
Code
14
2018,
are
amended
to
read
as
follows:
15
2.
Enter
into
agreements
with
any
institution
of
higher
16
education
qualified
educational
institution
,
the
state,
or
any
17
federal
or
other
state
agency,
or
other
entity
as
required
to
18
implement
this
chapter
.
19
5.
Carry
out
studies
and
projections
so
the
treasurer
of
20
state
may
advise
participants
regarding
present
and
estimated
21
future
higher
education
costs
qualified
education
expenses
22
and
levels
of
financial
participation
in
the
trust
required
23
in
order
to
enable
participants
to
achieve
their
educational
24
funding
objectives.
25
9.
Make
payments
to
institutions
of
higher
education
26
qualified
educational
institutions
,
participants,
or
27
beneficiaries,
pursuant
to
participation
agreements
on
behalf
28
of
beneficiaries.
29
14.
Establish,
impose,
and
collect
administrative
fees
30
and
charges
in
connection
with
transactions
of
the
trust,
and
31
provide
for
reasonable
service
charges
,
including
penalties
for
32
cancellations
and
late
payments
with
respect
to
participation
33
agreements
.
34
Sec.
111.
Section
12D.3,
subsections
1
and
2,
Code
2018,
are
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S.F.
_____
amended
to
read
as
follows:
1
1.
a.
Each
participation
agreement
may
require
a
2
participant
to
agree
to
invest
a
specific
amount
of
money
in
3
the
trust
for
a
specific
period
of
time
for
the
benefit
of
a
4
specific
beneficiary.
A
participant
shall
not
be
required
to
5
make
an
annual
contribution
on
behalf
of
a
beneficiary.
The
6
maximum
contribution
that
may
be
deducted
for
Iowa
income
tax
7
purposes
shall
not
exceed
two
thousand
dollars
per
beneficiary
8
per
year
adjusted
annually
to
reflect
increases
in
the
consumer
9
price
index.
The
treasurer
of
state
shall
set
an
account
10
balance
limit
to
maintain
compliance
with
section
529
of
the
11
Internal
Revenue
Code.
A
contribution
shall
not
be
permitted
12
to
the
extent
it
causes
the
aggregate
balance
of
all
accounts
13
established
for
the
same
beneficiary
under
the
trust
to
exceed
14
the
applicable
account
balance
limit.
15
b.
Participation
agreements
may
be
amended
to
provide
for
16
adjusted
levels
of
payments
based
upon
changed
circumstances
or
17
changes
in
educational
plans.
18
2.
The
execution
of
a
participation
agreement
by
the
trust
19
shall
not
guarantee
in
any
way
that
higher
education
costs
20
qualified
education
expenses
will
be
equal
to
projections
21
and
estimates
provided
by
the
trust
or
that
the
beneficiary
22
named
in
any
participation
agreement
will
attain
any
of
the
23
following:
24
a.
Be
admitted
to
an
institution
of
higher
education
a
25
qualified
educational
institution
.
26
b.
If
admitted,
be
determined
a
resident
for
tuition
27
purposes
by
the
institution
of
higher
education
qualified
28
educational
institution
.
29
c.
Be
allowed
to
continue
attendance
at
the
institution
of
30
higher
education
qualified
educational
institution
following
31
admission.
32
d.
Graduate
from
the
institution
of
higher
education
33
qualified
educational
institution
.
34
Sec.
112.
Section
12D.3,
Code
2018,
is
amended
by
adding
the
35
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following
new
subsection:
1
NEW
SUBSECTION
.
5.
A
participant
may
designate
a
successor
2
in
accordance
with
rules
adopted
by
the
treasurer
of
state.
3
The
designated
successor
shall
succeed
to
the
ownership
of
the
4
account
in
the
event
of
the
death
of
the
participant.
In
the
5
event
a
participant
dies
and
has
not
designated
a
successor
to
6
the
account,
the
following
criteria
shall
apply:
7
a.
The
beneficiary
of
the
account,
if
eighteen
years
of
8
age
or
older,
shall
become
the
owner
of
the
account
as
well
as
9
remain
the
beneficiary
upon
filing
the
appropriate
forms
in
10
accordance
with
rules
adopted
by
the
treasurer
of
state.
11
b.
If
the
beneficiary
of
the
account
is
under
the
age
of
12
eighteen,
account
ownership
shall
be
transferred
to
the
first
13
surviving
parent
or
other
legal
guardian
of
the
beneficiary
to
14
file
the
appropriate
forms
in
accordance
with
rules
adopted
by
15
the
treasurer
of
state.
16
Sec.
113.
Section
12D.4,
Code
2018,
is
amended
to
read
as
17
follows:
18
12D.4
Program
and
administrative
funds
——
investment
and
19
payments.
20
1.
a.
The
treasurer
of
state
shall
segregate
moneys
21
received
by
the
trust
into
two
funds:
the
program
fund
and
the
22
administrative
fund.
23
b.
All
moneys
paid
by
participants
in
connection
with
24
participation
agreements
shall
be
deposited
as
received
into
25
separate
accounts
within
the
program
fund.
26
c.
Contributions
to
the
trust
made
by
participants
may
only
27
be
made
in
the
form
of
cash.
28
d.
A
participant
or
beneficiary
shall
not
provide
investment
29
direction
regarding
program
contributions
or
earnings
held
by
30
the
trust
may,
directly
or
indirectly,
direct
the
investment
of
31
any
contributions
to
the
trust
or
any
earnings
thereon
no
more
32
than
two
times
in
a
calendar
year
.
33
e.
The
amount
of
cash
distributions
from
the
trust
and
all
34
other
qualified
state
tuition
programs
under
section
529
of
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_____
the
Internal
Revenue
Code
to
a
beneficiary
during
any
taxable
1
year
shall,
in
the
aggregate,
include
no
more
than
ten
thousand
2
dollars
in
expenses
for
tuition
in
connection
with
enrollment
3
at
an
elementary
or
secondary
public,
private,
or
religious
4
school
incurred
during
the
taxable
year.
5
2.
Moneys
accrued
by
participants
in
the
program
fund
of
6
the
trust
may
be
used
for
payments
to
any
institution
of
higher
7
education
qualified
educational
institution
.
Payments
can
be
8
made
to
the
qualified
educational
institution,
the
participant,
9
or
the
beneficiary.
10
Sec.
114.
Section
12D.6,
subsection
1,
paragraph
a,
Code
11
2018,
is
amended
to
read
as
follows:
12
a.
A
participant
retains
ownership
of
all
payments
made
13
under
a
participation
agreement
up
to
the
date
of
utilization
14
for
payment
of
higher
education
costs
qualified
education
15
expenses
for
the
beneficiary.
16
Sec.
115.
Section
12D.6,
subsections
2,
3,
and
5,
Code
2018,
17
are
amended
to
read
as
follows:
18
2.
In
the
event
the
program
is
terminated
prior
to
payment
19
of
higher
education
costs
qualified
education
expenses
for
the
20
beneficiary,
the
participant
is
entitled
to
a
refund
of
the
21
participant’s
account
balance.
22
3.
The
institution
of
higher
education
qualified
23
educational
institution
shall
obtain
ownership
of
the
payments
24
made
for
the
higher
education
costs
qualified
education
25
expenses
paid
to
the
institution
at
the
time
each
payment
is
26
made
to
the
institution.
27
5.
A
participant
may
transfer
ownership
rights
to
another
28
eligible
individual,
including
a
gift
of
the
ownership
rights
29
to
a
minor
beneficiary
participant,
or
may
transfer
funds
to
30
another
plan
under
the
trust
or
to
an
ABLE
account
as
permitted
31
under
section
529(c)(3)(C)
of
the
Internal
Revenue
Code
.
32
The
transfer
shall
be
made
and
the
property
distributed
in
33
accordance
with
rules
adopted
by
the
treasurer
of
state
or
with
34
the
terms
of
the
participation
agreement.
35
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Sec.
116.
Section
12D.7,
Code
2018,
is
amended
to
read
as
1
follows:
2
12D.7
Effect
of
payments
on
determination
of
need
and
3
eligibility
for
student
financial
aid.
4
A
student
loan
program,
student
grant
program,
or
other
5
program
administered
by
any
agency
of
the
state,
except
as
6
may
be
otherwise
provided
by
federal
law
or
the
provisions
7
of
any
specific
grant
applicable
to
that
law,
shall
not
take
8
into
account
and
shall
not
consider
amounts
available
for
9
the
payment
of
higher
education
costs
qualified
education
10
expenses
pursuant
to
the
Iowa
educational
savings
plan
trust
in
11
determining
need
and
eligibility
for
student
aid.
12
Sec.
117.
Section
12D.9,
subsection
1,
paragraph
a,
Code
13
2018,
is
amended
to
read
as
follows:
14
a.
Pursuant
to
section
12D.3,
subsection
1
,
paragraph
“a”
,
15
a
participant
may
make
contributions
to
an
account
which
is
16
established
for
the
purpose
of
meeting
the
qualified
higher
17
education
expenses
of
the
designated
beneficiary
of
the
18
account.
19
Sec.
118.
Section
422.7,
subsection
32,
paragraph
c,
Code
20
2018,
is
amended
by
striking
the
paragraph
and
inserting
in
21
lieu
thereof
the
following:
22
c.
(1)
Add,
to
the
extent
previously
deducted
as
a
23
contribution
to
the
trust,
the
amount
resulting
from
a
24
withdrawal
or
transfer
made
by
the
taxpayer
from
the
Iowa
25
educational
savings
plan
trust
for
purposes
other
than
any
of
26
the
following:
27
(a)
The
payment
of
qualified
higher
education
expenses.
28
(b)
The
payment
of
tuition
to
an
elementary
or
secondary
29
school
if
the
tuition
amounts
are
qualified
education
expenses.
30
(c)
A
change
in
beneficiaries
under,
or
transfer
to
another
31
account
within,
the
Iowa
educational
savings
plan
trust,
or
a
32
transfer
to
the
Iowa
ABLE
savings
plan
trust,
provided
such
33
change
or
transfer
is
permitted
under
section
12D.6,
subsection
34
5.
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(2)
For
purposes
of
this
paragraph:
1
(a)
“Elementary
or
secondary
school”
means
an
elementary
2
or
secondary
school
in
this
state
which
is
accredited
under
3
section
256.11,
and
adheres
to
the
provisions
of
the
federal
4
Civil
Rights
Act
of
1964
and
chapter
216.
5
(b)
“Institution
of
higher
education”
,
“qualified
education
6
expenses”
,
and
“tuition”
all
mean
the
same
as
defined
in
section
7
12D.1,
subsection
2.
8
(c)
(i)
“Qualified
higher
education
expenses”
means
the
same
9
as
defined
in
section
529(e)(3)
of
the
Internal
Revenue
Code.
10
(ii)
For
purposes
of
this
subparagraph
division
(c),
11
“Internal
Revenue
Code”
means
the
Internal
Revenue
Code
of
12
1954,
prior
to
the
date
of
its
redesignation
as
the
Internal
13
Revenue
Code
of
1986
by
the
Tax
Reform
Act
of
1986,
or
means
14
the
Internal
Revenue
Code
of
1986
as
amended
and
in
effect
on
15
January
1,
2018.
This
definition
shall
not
be
construed
to
16
include
any
amendment
to
the
Internal
Revenue
Code
enacted
17
after
the
date
specified
in
the
preceding
sentence,
including
18
any
amendment
with
retroactive
applicability
or
effectiveness.
19
Sec.
119.
Section
422.7,
subsection
34,
Code
2018,
is
20
amended
to
read
as
follows:
21
34.
a.
(1)
Subtract
the
amount
contributed
during
the
tax
22
year
on
behalf
of
a
designated
beneficiary
that
is
a
resident
23
of
this
state
to
the
Iowa
ABLE
savings
plan
trust
or
to
the
24
qualified
ABLE
program
with
which
the
state
has
contracted
25
pursuant
to
section
12I.10
,
not
to
exceed
the
maximum
26
contribution
level
established
in
section
12I.3,
subsection
1
,
27
paragraph
“d”
,
or
section
12I.10,
subsection
2
,
paragraph
“a”
,
28
as
applicable.
29
(2)
This
paragraph
“a”
shall
not
apply
to
any
amount
30
of
contribution
that
represents
a
transfer
from
the
Iowa
31
educational
savings
plan
trust
created
in
chapter
12D
that
32
meets
the
requirements
of
subsection
32,
paragraph
“c”
,
33
subparagraph
(1),
subparagraph
division
(c),
and
that
was
34
previously
deducted
as
a
contribution
to
the
Iowa
educational
35
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savings
plan
trust.
1
b.
Add
the
amount
resulting
from
the
cancellation
of
a
2
participation
agreement
refunded
to
the
taxpayer
as
an
account
3
owner
in
the
Iowa
ABLE
savings
plan
trust
or
the
qualified
4
ABLE
program
with
which
the
state
has
contracted
pursuant
to
5
section
12I.10
to
the
extent
previously
deducted
pursuant
6
to
this
subsection
by
the
taxpayer
or
any
other
person
as
a
7
contribution
to
the
trust
or
qualified
ABLE
program
,
or
to
the
8
extent
the
amount
was
previously
deducted
by
the
taxpayer
or
9
any
other
person
pursuant
to
subsection
32,
paragraph
“a”
,
and
10
qualified
as
a
transfer
under
paragraph
“a”
,
subparagraph
(2),
11
of
this
subsection
.
12
c.
Add
the
amount
resulting
from
a
withdrawal
made
by
a
13
taxpayer
from
the
Iowa
ABLE
savings
plan
trust
or
the
qualified
14
ABLE
program
with
which
the
state
has
contracted
pursuant
to
15
section
12I.10
for
purposes
other
than
the
payment
of
qualified
16
disability
expenses
to
the
extent
previously
deducted
pursuant
17
to
this
subsection
by
the
taxpayer
or
any
other
person
as
a
18
contribution
to
the
trust
or
qualified
ABLE
program
,
or
to
the
19
extent
the
amount
was
previously
deducted
by
the
taxpayer
or
20
any
other
person
pursuant
to
subsection
32,
paragraph
“a”
,
and
21
qualified
as
a
transfer
under
paragraph
“a”
,
subparagraph
(2),
22
of
this
subsection
.
23
Sec.
120.
Section
627.6,
Code
2018,
is
amended
by
adding
the
24
following
new
subsection:
25
NEW
SUBSECTION
.
17.
The
debtor’s
interest,
whether
as
26
participant
or
beneficiary,
in
contributions
and
assets,
27
including
the
accumulated
earnings
and
market
increases
in
28
value,
held
in
an
account
in
the
Iowa
educational
savings
plan
29
trust
organized
under
chapter
12D.
30
Sec.
121.
EFFECTIVE
DATE.
This
division
of
this
Act,
being
31
deemed
of
immediate
importance,
takes
effect
upon
enactment.
32
Sec.
122.
RETROACTIVE
APPLICABILITY.
33
1.
Except
as
provided
in
subsection
2,
this
division
of
this
34
Act
applies
retroactively
to
January
1,
2018,
for
withdrawals
35
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from
the
Iowa
educational
savings
plan
trust
made
on
or
after
1
that
date.
2
2.
The
sections
of
this
division
of
this
Act
amending
3
section
422.7
apply
retroactively
to
January
1,
2018,
for
tax
4
years
beginning
on
or
after
that
date,
and
for
withdrawals
from
5
the
Iowa
educational
savings
plan
trust
made
on
or
after
that
6
date.
7
DIVISION
VI
8
SALES
AND
USE
TAXES
9
Sec.
123.
Section
15J.4,
subsection
3,
paragraph
f,
Code
10
2018,
is
amended
to
read
as
follows:
11
f.
The
total
aggregate
amount
of
state
sales
tax
revenues
12
and
state
hotel
and
motel
tax
revenues
that
may
be
approved
by
13
the
board
for
remittance
to
all
municipalities
and
that
may
14
be
transferred
to
the
state
reinvestment
district
fund
under
15
section
423.2,
subsection
11
,
423.2A
or
section
423A.6
,
and
16
remitted
to
all
municipalities
having
a
reinvestment
district
17
under
this
chapter
shall
not
exceed
one
hundred
million
18
dollars.
19
Sec.
124.
Section
15J.5,
subsection
1,
paragraph
a,
Code
20
2018,
is
amended
to
read
as
follows:
21
a.
The
department
shall
calculate
quarterly
the
amount
of
22
new
state
sales
tax
revenues
for
each
district
established
in
23
the
state
to
be
deposited
in
the
state
reinvestment
district
24
fund
created
in
section
15J.6
,
pursuant
to
section
423.2,
25
subsection
11
,
paragraph
“b”
423.2A,
subsection
2
,
subject
to
26
remittance
limitations
established
by
the
board
pursuant
to
27
section
15J.4,
subsection
3
.
28
Sec.
125.
Section
15J.6,
subsection
1,
Code
2018,
is
amended
29
to
read
as
follows:
30
1.
A
state
reinvestment
district
fund
is
established
in
the
31
state
treasury
under
the
control
of
the
department
consisting
32
of
the
new
state
sales
tax
revenues
collected
within
each
33
district
and
deposited
in
the
fund
pursuant
to
section
423.2,
34
subsection
11
,
paragraph
“b”
423.2A,
subsection
2
,
and
the
35
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_____
new
state
hotel
and
motel
tax
revenues
collected
within
each
1
district
and
deposited
in
the
fund
pursuant
to
section
423A.6
.
2
Moneys
deposited
in
the
fund
are
appropriated
to
the
department
3
for
the
purposes
of
this
section
.
Moneys
in
the
fund
shall
4
only
be
used
for
the
purposes
of
this
section
.
5
Sec.
126.
Section
418.11,
subsection
1,
Code
2018,
is
6
amended
to
read
as
follows:
7
1.
The
department
of
revenue
shall
calculate
quarterly
the
8
amount
of
increased
sales
tax
revenues
for
each
governmental
9
entity
approved
to
use
sales
tax
increment
revenues
and
the
10
amount
of
such
revenues
to
be
transferred
to
the
sales
tax
11
increment
fund
pursuant
to
section
423.2,
subsection
11
,
12
paragraph
“b”
423.2A,
subsection
2
.
13
Sec.
127.
Section
418.12,
subsection
1,
Code
2018,
is
14
amended
to
read
as
follows:
15
1.
A
sales
tax
increment
fund
is
established
as
a
separate
16
and
distinct
fund
in
the
state
treasury
under
the
control
of
17
the
department
of
revenue
consisting
of
the
amount
of
the
18
increased
state
sales
and
services
tax
revenues
collected
by
19
the
department
of
revenue
within
each
applicable
area
specified
20
in
section
418.11,
subsection
3
,
and
deposited
in
the
fund
21
pursuant
to
section
423.2,
subsection
11
,
paragraph
“b”
423.2A,
22
subsection
2
.
Moneys
deposited
in
the
fund
are
appropriated
23
to
the
department
of
revenue
for
the
purposes
of
this
section
.
24
Moneys
in
the
fund
shall
only
be
used
for
the
purposes
of
this
25
section
.
26
Sec.
128.
Section
421.26,
Code
2018,
is
amended
to
read
as
27
follows:
28
421.26
Personal
liability
for
tax
due.
29
If
a
licensee
or
other
person
under
section
452A.65
,
a
30
retailer
or
purchaser
under
chapter
423A
,
423B
,
or
423E
,
or
31
section
sections
423.14,
423.14A,
423.29,
423.31
,
423.32,
or
32
423.33
,
or
a
retailer
or
purchaser
under
section
423.32
,
or
33
a
user
under
section
423.34
,
or
a
permit
holder
or
licensee
34
under
section
453A.13
,
453A.16
,
or
453A.44
fails
to
pay
a
tax
35
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_____
under
those
sections
when
due,
an
officer
of
a
corporation
1
or
association,
notwithstanding
section
489.304
,
a
member
or
2
manager
of
a
limited
liability
company,
or
a
partner
of
a
3
partnership,
having
control
or
supervision
of
or
the
authority
4
for
remitting
the
tax
payments
and
having
a
substantial
legal
5
or
equitable
interest
in
the
ownership
of
the
corporation,
6
association,
limited
liability
company,
or
partnership,
who
has
7
intentionally
failed
to
pay
the
tax
is
personally
liable
for
8
the
payment
of
the
tax,
interest,
and
penalty
due
and
unpaid.
9
However,
this
section
shall
not
apply
to
taxes
on
accounts
10
receivable.
The
dissolution
of
a
corporation,
association,
11
limited
liability
company,
or
partnership
shall
not
discharge
a
12
person’s
liability
for
failure
to
remit
the
tax
due.
13
Sec.
129.
Section
423.1,
subsection
5,
Code
2018,
is
amended
14
to
read
as
follows:
15
5.
“Agricultural
production”
includes
means
the
commercial
16
production
of
livestock,
milk,
honey,
eggs,
or
plants,
17
including
but
not
limited
to
flowering,
ornamental,
or
18
vegetable
plants
in
commercial
greenhouses
or
otherwise,
19
and
commercial
production
from
aquaculture,
and
commercial
20
production
from
silvicultural
activities.
“Agricultural
21
products”
includes
flowering,
ornamental,
or
vegetable
plants
22
and
those
products
of
aquaculture
and
silviculture.
23
Sec.
130.
Section
423.1,
Code
2018,
is
amended
by
adding
the
24
following
new
subsection:
25
NEW
SUBSECTION
.
22A.
“Information
services”
means
every
26
activity,
process,
or
function
by
which
a
seller
accumulates,
27
prepares,
organizes,
conveys,
analyzes,
or
delivers
data,
28
facts,
knowledge,
procedures,
information,
and
other
similar
29
services
to
a
purchaser
through
any
tangible,
intangible,
30
or
electronic
medium.
Information
accumulated,
prepared,
31
or
organized
for
a
purchaser
is
an
information
service
even
32
though
it
may
incorporate
preexisting
components
of
data
or
33
other
information.
“Information
services”
includes
but
is
not
34
limited
to
database
files,
research
information,
genealogical
35
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_____
information,
and
other
similar
services.
1
Sec.
131.
Section
423.1,
subsection
24,
paragraph
a,
Code
2
2018,
is
amended
to
read
as
follows:
3
a.
“Lease
or
rental”
means
any
transfer
of
possession
4
or
control
of
,
or
access
to,
tangible
personal
property
or
5
specified
digital
products
for
a
fixed
or
indeterminate
term
6
for
consideration.
A
“lease
or
rental”
may
include
future
7
options
to
purchase
or
extend.
8
Sec.
132.
Section
423.1,
subsection
37,
Code
2018,
is
9
amended
to
read
as
follows:
10
37.
“Place
of
business”
means
any
warehouse,
store,
11
place,
office,
building,
or
structure
where
goods,
wares,
or
12
merchandise
tangible
personal
property,
specified
digital
13
products,
or
services
are
offered
for
sale
at
retail
or
where
14
any
taxable
amusement
is
conducted,
or
each
office
where
gas,
15
water,
heat,
communication,
or
electric
services
are
offered
16
for
sale
at
retail.
When
a
retailer
or
amusement
operator
17
sells
merchandise
by
means
of
vending
machines
or
operates
18
music
or
amusement
devices
by
coin-operated
machines
at
more
19
than
one
location
within
the
state,
the
office,
building,
or
20
place
where
the
books,
papers,
and
records
of
the
taxpayer
are
21
kept
shall
be
deemed
to
be
the
taxpayer’s
place
of
business.
22
Sec.
133.
Section
423.1,
Code
2018,
is
amended
by
adding
the
23
following
new
subsection:
24
NEW
SUBSECTION
.
36A.
“Personal
property”
includes
but
is
25
not
limited
to
tangible
personal
property
and
specified
digital
26
products.
27
Sec.
134.
Section
423.1,
subsection
43,
paragraph
a,
28
subparagraph
(3),
Code
2018,
is
amended
to
read
as
follows:
29
(3)
Taking
possession
or
making
first
use
of
digital
goods
30
specified
digital
products
,
whichever
comes
first.
31
Sec.
135.
Section
423.1,
subsection
47,
Code
2018,
is
32
amended
to
read
as
follows:
33
47.
“Retailer”
means
and
includes
every
person
engaged
34
in
the
business
of
selling
tangible
personal
property
,
35
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_____
specified
digital
products,
or
taxable
services
at
retail,
or
1
the
furnishing
of
gas,
electricity,
water,
or
communication
2
service,
and
tickets
or
admissions
to
places
of
amusement
3
and
athletic
events
or
operating
amusement
devices
or
other
4
forms
of
commercial
amusement
from
which
revenues
are
derived.
5
However,
when
in
the
opinion
of
the
director
it
is
necessary
6
for
the
efficient
administration
of
this
chapter
to
regard
7
any
salespersons,
representatives,
truckers,
peddlers,
or
8
canvassers
as
agents
of
the
dealers,
distributors,
supervisors,
9
employers,
or
persons
under
whom
they
operate
or
from
whom
10
they
obtain
tangible
personal
property
,
services,
or
specified
11
digital
products
sold
by
them
irrespective
of
whether
or
not
12
they
are
making
sales
on
their
own
behalf
or
on
behalf
of
such
13
dealers,
distributors,
supervisors,
employers,
or
persons,
14
the
director
may
so
regard
them,
and
may
regard
such
dealers,
15
distributors,
supervisors,
employers,
or
persons
as
retailers
16
for
the
purposes
of
this
chapter
.
“Retailer”
includes
a
seller
17
obligated
to
collect
sales
or
use
tax
,
including
any
person
18
obligated
to
collect
sales
and
use
tax
pursuant
to
section
19
423.14A
.
20
Sec.
136.
Section
423.1,
subsection
48,
paragraph
a,
Code
21
2018,
is
amended
to
read
as
follows:
22
a.
“Retailer
maintaining
a
place
of
business
in
this
state”
23
or
any
like
term
includes
any
of
the
following:
24
(1)
A
retailer
having
or
maintaining
within
this
state,
25
directly
or
by
a
subsidiary,
an
office,
distribution
house,
26
sales
house,
warehouse,
or
other
place
of
business,
or
any
27
representative
operating
within
this
state
under
the
authority
28
of
the
retailer
or
its
subsidiary,
irrespective
of
whether
that
29
place
of
business
or
representative
is
located
here
permanently
30
or
temporarily,
or
whether
the
retailer
or
subsidiary
is
31
admitted
to
do
business
within
this
state
pursuant
to
chapter
32
490
.
33
(2)
A
person
obligated
to
collect
sales
and
use
tax
pursuant
34
to
section
423.14A.
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_____
Sec.
137.
Section
423.1,
subsection
48,
paragraph
b,
1
subparagraph
(1),
unnumbered
paragraph
1,
Code
2018,
is
amended
2
to
read
as
follows:
3
A
retailer
shall
be
presumed
to
be
maintaining
a
place
of
4
business
in
this
state
,
as
defined
in
for
purposes
of
paragraph
5
“a”
,
subparagraph
(1),
if
any
person
that
has
substantial
nexus
6
in
this
state,
other
than
a
person
acting
in
its
capacity
as
a
7
common
carrier,
does
any
of
the
following:
8
Sec.
138.
Section
423.1,
subsection
48,
paragraph
b,
9
subparagraph
(1),
subparagraph
division
(b),
Code
2018,
is
10
amended
to
read
as
follows:
11
(b)
Maintains
an
office,
distribution
facility,
warehouse,
12
storage
place,
or
similar
place
of
business
in
this
state
to
13
facilitate
the
delivery
of
personal
property
or
services
sold
14
by
the
retailer
to
the
retailer’s
customers.
15
Sec.
139.
Section
423.1,
subsection
50,
Code
2018,
is
16
amended
to
read
as
follows:
17
50.
“Sales”
or
“sale”
means
any
transfer,
exchange,
or
18
barter,
conditional
or
otherwise,
in
any
manner
or
by
any
means
19
whatsoever,
for
consideration
,
including
but
not
limited
to
any
20
such
transfer,
exchange,
or
barter
on
a
subscription
basis
.
21
Sec.
140.
Section
423.1,
Code
2018,
is
amended
by
adding
the
22
following
new
subsection:
23
NEW
SUBSECTION
.
55A.
“Sold
at
retail
in
the
state”
and
24
other
references
to
sales
“in
the
state”
or
“in
this
state”
25
includes
but
is
not
limited
to
sales
sourced
to
this
state
26
under
this
chapter.
27
Sec.
141.
Section
423.1,
Code
2018,
is
amended
by
adding
the
28
following
new
subsection:
29
NEW
SUBSECTION
.
55B.
a.
“Specified
digital
products”
means
30
electronically
transferred
digital
audio-visual
works,
digital
31
audio
works,
digital
books,
or
other
digital
products.
32
b.
For
purposes
of
this
subsection:
33
(1)
“Digital
audio-visual
works”
means
a
series
of
related
34
images
which,
when
shown
in
succession,
impart
an
impression
of
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_____
motion,
together
with
accompanying
sounds,
if
any.
1
(2)
“Digital
audio
works”
means
works
that
result
from
2
the
fixation
of
a
series
of
musical,
spoken,
or
other
sounds,
3
including
but
not
limited
to
ringtones.
For
purposes
of
this
4
subparagraph,
“ringtones”
means
digitized
sound
files
that
are
5
downloaded
onto
a
device
and
that
may
be
used
to
alert
the
6
customer
with
respect
to
a
communication.
7
(3)
“Digital
books”
means
works
that
are
generally
8
recognized
in
the
ordinary
and
usual
sense
as
books.
9
(4)
“Electronically
transferred”
means
obtained
or
accessed
10
by
the
purchaser
by
means
other
than
tangible
storage
media,
11
including
but
not
limited
to
a
specified
digital
product
12
purchased
through
a
computer
software
application,
commonly
13
referred
to
as
an
in-app
purchase,
or
through
another
specified
14
digital
product,
or
through
any
other
means.
15
(5)
“Other
digital
products”
means
greeting
cards,
images,
16
video
or
electronic
games
or
entertainment,
news
or
information
17
products,
and
computer
software
applications.
18
Sec.
142.
Section
423.1,
Code
2018,
is
amended
by
adding
the
19
following
new
subsection:
20
NEW
SUBSECTION
.
57A.
“Subscription”
means
any
arrangement
21
in
which
a
person
has
the
right
or
ability
to
access,
22
receive,
use,
obtain,
purchase,
or
otherwise
acquire
tangible
23
personal
property,
specified
digital
products,
or
services
24
on
a
permanent
or
less
than
permanent
basis,
regardless
of
25
whether
the
person
actually
accesses,
receives,
uses,
obtains,
26
purchases,
or
otherwise
acquires
such
tangible
personal
27
property,
specified
digital
product,
or
service.
28
Sec.
143.
Section
423.1,
subsections
62,
63,
and
64,
Code
29
2018,
are
amended
to
read
as
follows:
30
62.
“Use”
means
and
includes
the
exercise
by
any
person
of
31
any
right
or
power
over
or
access
to
tangible
personal
property
32
or
a
specified
digital
product
incident
to
the
ownership
of
33
that
property
,
or
any
right
or
power
over
or
access
to
the
34
product
or
result
of
a
service
.
A
retailer’s
or
building
35
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_____
contractor’s
sale
of
manufactured
housing
for
use
in
this
1
state,
whether
in
the
form
of
tangible
personal
property
or
2
of
realty,
is
a
use
of
that
property
for
the
purposes
of
this
3
chapter
.
4
63.
“Use
tax”
means
the
tax
levied
under
subchapter
III
of
5
this
chapter
for
which
the
retailer
collects
and
remits
tax
to
6
the
department
.
7
64.
“User”
means
the
immediate
recipient
of
the
personal
8
property
or
services
who
is
entitled
to
exercise
a
right
of
or
9
power
over
or
access
to
the
personal
property,
or
the
product
10
or
result
of
such
services.
11
Sec.
144.
Section
423.2,
subsection
1,
paragraph
a,
12
subparagraph
(1),
Code
2018,
is
amended
to
read
as
follows:
13
(1)
Sales
of
engraving,
photography,
retouching,
printing,
14
and
binding
services.
15
Sec.
145.
Section
423.2,
subsection
6,
Code
2018,
is
amended
16
to
read
as
follows:
17
6.
a.
The
sales
price
of
any
of
the
following
enumerated
18
services
is
subject
to
the
tax
imposed
by
subsection
5
:
19
a.
alteration
Alteration
and
garment
repair
;
armored
.
20
b.
Armored
car
;
vehicle
.
21
c.
Vehicle
repair
;
battery
.
22
d.
Battery
,
tire,
and
allied
;
investment
.
23
e.
Investment
counseling
;
service
.
24
f.
Service
charges
of
all
financial
institutions
;
barber
.
25
For
the
purposes
of
this
paragraph,
“financial
institutions”
26
means
all
national
banks,
federally
chartered
savings
and
loan
27
associations,
federally
chartered
savings
banks,
federally
28
chartered
credit
unions,
banks
organized
under
chapter
524,
29
credit
unions
organized
under
chapter
533,
and
all
banks,
30
savings
banks,
credit
unions,
and
savings
and
loan
associations
31
chartered
or
otherwise
created
under
the
laws
of
any
state
and
32
doing
business
in
Iowa.
33
g.
Barber
and
beauty
;
boat
.
34
h.
Boat
repair
;
vehicle
.
35
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i.
Vehicle
wash
and
wax
;
campgrounds;
carpentry;
roof
.
1
j.
Campgrounds.
2
k.
Carpentry.
3
l.
Roof
,
shingle,
and
glass
repair
;
dance
.
4
m.
Dance
schools
and
dance
studios
;
dating
.
5
n.
Dating
services
;
dry
.
6
o.
Dry
cleaning,
pressing,
dyeing,
and
laundering
excluding
7
the
use
of
self-pay
washers
and
dryers
;
electrical
.
8
p.
Electrical
and
electronic
repair
and
installation
;
9
excavating
.
10
q.
Excavating
and
grading
;
farm
.
11
r.
Farm
implement
repair
of
all
kinds
;
flying
.
12
s.
Flying
service
;
furniture
.
13
t.
Furniture
,
rug,
carpet,
and
upholstery
repair
and
14
cleaning
;
fur
.
15
u.
Fur
storage
and
repair
;
golf
.
16
v.
Golf
and
country
clubs
and
all
commercial
recreation
;
17
gun
.
18
w.
Gun
and
camera
repair
;
house
.
19
x.
House
and
building
moving
;
household
.
20
y.
Household
appliance,
television,
and
radio
repair
;
21
janitorial
.
22
z.
Janitorial
and
building
maintenance
or
cleaning
;
jewelry
.
23
aa.
Jewelry
and
watch
repair
;
lawn
.
24
ab.
Lawn
care,
landscaping,
and
tree
trimming
and
removal
;
.
25
ac.
Personal
transportation
service,
including
but
not
26
limited
to
taxis,
driver
service,
ride
sharing
service,
rides
27
for
hire,
and
limousine
service
,
including
driver;
machine
.
28
ad.
Machine
operator
;
machine
.
29
ae.
Machine
repair
of
all
kinds
;
motor
.
30
af.
Motor
repair
;
motorcycle
.
31
ag.
Motorcycle
,
scooter,
and
bicycle
repair
;
oilers
.
32
ah.
Oilers
and
lubricators
;
office
.
33
ai.
Office
and
business
machine
repair
;
painting
.
34
aj.
Painting
,
papering,
and
interior
decorating
;
parking
.
35
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ak.
Parking
facilities
;
pay
.
1
al.
Pay
television
;
pet
,
including
but
not
limited
to
2
streaming
video,
video
on-demand,
and
pay-per-view.
3
am.
Pet
grooming
;
pipe
.
4
an.
Pipe
fitting
and
plumbing
;
wood
.
5
ao.
Wood
preparation
;
executive
.
6
ap.
Executive
search
agencies
;
private
.
7
aq.
Private
employment
agencies,
excluding
services
for
8
placing
a
person
in
employment
where
the
principal
place
of
9
employment
of
that
person
is
to
be
located
outside
of
the
10
state
;
reflexology;
security
.
11
ar.
Reflexology.
12
as.
Security
and
detective
services,
excluding
private
13
security
and
detective
services
furnished
by
a
peace
officer
14
with
the
knowledge
and
consent
of
the
chief
executive
officer
15
of
the
peace
officer’s
law
enforcement
agency
;
sewage
.
16
at.
Sewage
services
for
nonresidential
commercial
17
operations
;
sewing
.
18
au.
Sewing
and
stitching
;
shoe
.
19
av.
Shoe
repair
and
shoeshine
;
sign
.
20
aw.
Sign
construction
and
installation
;
storage
.
21
ax.
Storage
of
household
goods,
mini-storage,
and
22
warehousing
of
raw
agricultural
products
;
swimming
.
23
ay.
Swimming
pool
cleaning
and
maintenance
;
tanning
.
24
az.
Tanning
beds
or
salons
;
taxidermy
.
25
ba.
Taxidermy
services
;
telephone
.
26
bb.
Telephone
answering
service
;
test
.
27
bc.
Test
laboratories,
including
mobile
testing
laboratories
28
and
field
testing
by
testing
laboratories,
and
excluding
tests
29
on
humans
or
animals
and
excluding
environmental
testing
30
services
;
termite
.
31
bd.
Termite
,
bug,
roach,
and
pest
eradicators
;
tin
.
32
be.
Tin
and
sheet
metal
repair
;
transportation
.
33
bf.
Transportation
service
consisting
of
the
rental
of
34
recreational
vehicles
or
recreational
boats,
or
the
rental
of
35
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vehicles
subject
to
registration
which
are
registered
for
a
1
gross
weight
of
thirteen
tons
or
less
for
a
period
of
sixty
2
days
or
less,
or
the
rental
of
aircraft
for
a
period
of
sixty
3
days
or
less
;
.
4
bg.
Turkish
baths,
massage,
and
reducing
salons,
excluding
5
services
provided
by
massage
therapists
licensed
under
chapter
6
152C
;
water
.
7
bh.
Water
conditioning
and
softening
;
weighing;
welding;
8
well
.
9
bi.
Weighing.
10
bj.
Welding.
11
bk.
Well
drilling
;
wrapping
.
12
bl.
Wrapping
,
packing,
and
packaging
of
merchandise
other
13
than
processed
meat,
fish,
fowl,
and
vegetables
;
wrecking
.
14
bm.
Wrecking
service
;
wrecker
.
15
bn.
Wrecker
and
towing.
16
b.
For
the
purposes
of
this
subsection
,
“financial
17
institutions”
means
all
national
banks,
federally
chartered
18
savings
and
loan
associations,
federally
chartered
savings
19
banks,
federally
chartered
credit
unions,
banks
organized
under
20
chapter
524
,
credit
unions
organized
under
chapter
533
,
and
21
all
banks,
savings
banks,
credit
unions,
and
savings
and
loan
22
associations
chartered
or
otherwise
created
under
the
laws
of
23
any
state
and
doing
business
in
Iowa.
24
bo.
Photography.
25
bp.
Retouching.
26
bq.
Storage
of
tangible
or
electronic
files,
documents,
or
27
other
records.
28
br.
Information
services.
29
bs.
Services
arising
from
or
related
to
installing,
30
maintaining,
servicing,
repairing,
operating,
upgrading,
or
31
enhancing
specified
digital
products.
32
bt.
Video
game
services
and
tournaments.
33
bu.
Software
as
a
service.
34
Sec.
146.
Section
423.2,
subsection
8,
Code
2018,
is
amended
35
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by
adding
the
following
new
paragraph:
1
NEW
PARAGRAPH
.
d.
A
transaction
that
otherwise
meets
2
the
definition
of
“bundled
transaction”
as
defined
in
this
3
subsection
is
not
a
bundled
transaction
if
it
is
any
of
the
4
following:
5
(1)
The
retail
sale
of
tangible
personal
property
and
a
6
service
where
the
tangible
personal
property
is
essential
7
to
the
use
of
the
service,
and
is
provided
exclusively
in
8
connection
with
the
service,
and
the
true
object
of
the
9
transaction
is
the
service.
10
(2)
The
retail
sale
of
services
where
one
service
is
11
provided
that
is
essential
to
the
use
or
receipt
of
a
second
12
service
and
the
first
service
is
provided
exclusively
in
13
connection
with
the
second
service
and
the
true
object
of
the
14
transaction
is
the
second
service.
15
(3)
(a)
A
transaction
that
includes
taxable
products
and
16
nontaxable
products
and
the
purchase
price
or
sales
price
of
17
the
taxable
products
is
de
minimis.
18
(b)
For
purposes
of
this
subparagraph,
“de
minimis”
means
19
the
seller’s
purchase
or
sales
price
of
the
taxable
products
20
is
ten
percent
or
less
of
the
total
purchase
price
or
sales
21
price
of
the
bundled
products.
Sellers
shall
use
either
the
22
purchase
price
or
the
sale
price
of
the
products
to
determine
23
if
the
taxable
products
are
de
minimis.
Sellers
may
not
use
24
a
combination
of
the
purchase
price
and
sales
price
of
the
25
products
to
determine
if
the
taxable
products
are
de
minimis.
26
(4)
The
retail
sale
of
exempt
tangible
personal
property
and
27
taxable
tangible
personal
property
where
all
of
the
following
28
apply:
29
(a)
The
transaction
includes
food
and
food
ingredients,
30
drugs,
durable
medical
equipment,
mobility
enhancing
equipment,
31
prosthetic
devices,
or
medical
supplies.
32
(b)
The
seller’s
purchase
price
or
sales
price
of
the
33
taxable
tangible
personal
property
is
fifty
percent
or
less
34
of
the
total
purchase
price
or
sales
price
of
the
bundled
35
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tangible
personal
property.
Sellers
may
not
use
a
combination
1
of
the
purchase
price
and
sales
price
of
the
tangible
personal
2
property
when
making
the
fifty
percent
determination
for
a
3
transaction.
4
Sec.
147.
Section
423.2,
Code
2018,
is
amended
by
adding
the
5
following
new
subsection:
6
NEW
SUBSECTION
.
9A.
a.
A
tax
of
six
percent
is
imposed
on
7
the
sales
price
of
specified
digital
products
sold
at
retail
8
in
the
state.
The
tax
applies
whether
the
purchaser
obtains
9
permanent
use
or
less
than
permanent
use
of
the
specified
10
digital
product,
whether
the
sale
is
conditioned
or
not
11
conditioned
upon
continued
payment
from
the
purchaser,
and
12
whether
the
sale
is
on
a
subscription
basis
or
is
not
on
a
13
subscription
basis.
14
b.
The
sale
of
a
digital
code
that
may
be
used
to
obtain
15
or
access
a
specified
digital
product
shall
be
taxed
in
the
16
same
manner
as
the
specified
digital
product.
For
purposes
17
of
this
paragraph,
“digital
code”
means
a
method
that
permits
18
a
purchaser
to
obtain
or
access
at
a
later
date
a
specified
19
digital
product.
20
Sec.
148.
Section
423.2,
subsections
10,
11,
and
12,
Code
21
2018,
are
amended
by
striking
the
subsections.
22
Sec.
149.
NEW
SECTION
.
423.2A
Deposit
and
transfer
of
23
revenues.
24
1.
a.
All
revenues
arising
under
the
operation
of
the
25
provisions
of
this
subchapter
II
shall
be
deposited
into
the
26
general
fund
of
the
state.
27
b.
Subsequent
to
the
deposit
into
the
general
fund
of
28
the
state,
the
director
shall
credit
an
amount
equal
to
the
29
product
of
the
sales
tax
rate
imposed
in
section
423.2
times
30
the
sales
price
of
the
tangible
personal
property
or
services
31
furnished
to
purchasers
at
a
baseball
and
softball
complex
that
32
has
received
an
award
under
section
15F.207
and
that
meets
33
the
qualifications
of
section
423.4,
subsection
10,
into
the
34
baseball
and
softball
complex
sales
tax
rebate
fund
created
35
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under
section
423.4,
subsection
10,
paragraph
“e”
.
The
director
1
shall
credit
the
moneys
beginning
the
first
day
of
the
quarter
2
following
July
1,
2016.
This
paragraph
is
repealed
thirty
3
days
following
the
date
on
which
five
million
dollars
in
total
4
rebates
have
been
provided
under
section
423.4,
subsection
10.
5
2.
Subsequent
to
the
deposit
into
the
general
fund
of
the
6
state
pursuant
to
subsection
1,
the
department
shall
do
the
7
following
in
the
order
prescribed:
8
a.
Transfer
the
revenues
collected
under
chapter
423B.
9
b.
Transfer
from
the
remaining
revenues
the
amounts
required
10
under
Article
VII,
section
10,
of
the
Constitution
of
the
State
11
of
Iowa
to
the
natural
resources
and
outdoor
recreation
trust
12
fund
created
in
section
461.31,
if
applicable.
13
c.
Transfer
one-sixth
of
the
remaining
revenues
to
the
14
secure
an
advanced
vision
for
education
fund
created
in
section
15
423F.2.
This
paragraph
“c”
is
repealed
December
31,
2029.
16
d.
Transfer
to
the
baseball
and
softball
complex
sales
tax
17
rebate
fund
that
portion
of
the
sales
tax
receipts
described
18
in
subsection
1,
paragraph
“b”
,
remaining
after
the
transfers
19
required
under
paragraphs
“a”
,
“b”
,
and
“c”
of
this
subsection
20
2.
This
paragraph
is
repealed
thirty
days
following
the
date
21
on
which
five
million
dollars
in
total
rebates
have
been
22
provided
under
section
423.4,
subsection
10.
23
e.
Beginning
the
first
day
of
the
calendar
quarter
24
beginning
on
the
reinvestment
district’s
commencement
date,
25
subject
to
remittance
limitations
established
by
the
economic
26
development
authority
board
pursuant
to
section
15J.4,
27
subsection
3,
transfer
to
a
district
account
created
in
the
28
state
reinvestment
district
fund
for
each
reinvestment
district
29
established
under
chapter
15J,
the
amount
of
new
state
sales
30
tax
revenue,
determined
in
section
15J.5,
subsection
1,
31
paragraph
“b”
,
in
the
district,
that
remains
after
the
prior
32
transfers
required
under
this
subsection
2.
Such
transfers
33
shall
cease
pursuant
to
section
15J.8.
34
f.
Subject
to
the
limitation
on
the
calculation
and
35
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deposit
of
sales
tax
increment
revenues
in
section
418.12,
1
beginning
the
first
day
of
the
quarter
following
adoption
2
of
the
resolution
pursuant
to
section
418.4,
subsection
3,
3
paragraph
“d”
,
transfer
to
the
account
created
in
the
sales
tax
4
increment
fund
for
each
governmental
entity
approved
to
use
5
sales
tax
increment
revenues
under
chapter
418,
that
portion
6
of
the
increase
in
sales
tax
revenue,
determined
in
section
7
418.11,
subsection
2,
paragraph
“d”
,
in
the
applicable
area
of
8
the
governmental
entity,
that
remains
after
the
other
transfers
9
required
under
this
subsection
2.
10
g.
Beginning
the
first
day
of
the
quarter
following
July
11
1,
2014,
transfer
to
the
raceway
facility
tax
rebate
fund
12
created
in
section
423.4,
subsection
11,
paragraph
“e”
,
that
13
portion
of
the
sales
tax
receipts
collected
and
remitted
upon
14
sales
of
tangible
personal
property
or
services
furnished
by
15
retailers
at
a
raceway
facility
meeting
the
qualifications
of
16
section
423.4,
subsection
11,
that
remains
after
the
transfers
17
required
in
paragraphs
“a”
through
“f”
of
this
subsection
18
2.
This
subparagraph
is
repealed
June
30,
2025,
or
thirty
19
days
following
the
date
on
which
an
amount
of
total
rebates
20
specified
in
section
423.4,
subsection
11,
paragraph
“c”
,
21
subparagraph
(4),
subparagraph
division
(a)
or
(b),
whichever
22
is
applicable,
has
been
provided
or
thirty
days
following
the
23
date
on
which
rebates
cease
as
provided
in
section
423.4,
24
subsection
11,
paragraph
“c”
,
subparagraph
(5),
whichever
is
25
earliest.
26
3.
Of
the
amount
of
sales
tax
revenue
actually
transferred
27
per
quarter
pursuant
to
subsection
2,
paragraphs
“e”
and
“f”
,
28
the
department
shall
retain
an
amount
equal
to
the
actual
cost
29
of
administering
the
transfers
under
subsection
2,
paragraphs
30
“e”
and
“f”
,
or
twenty-five
thousand
dollars,
whichever
is
31
less.
The
amount
retained
by
the
department
pursuant
to
this
32
subsection
shall
be
divided
pro
rata
each
quarter
between
33
the
amounts
that
would
have
been
transferred
pursuant
to
34
subsection
2,
paragraphs
“e”
and
“f”
,
without
the
deduction
35
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_____
made
by
operation
of
this
subsection.
Revenues
retained
by
1
the
department
pursuant
to
this
subsection
shall
be
considered
2
repayment
receipts
as
defined
in
section
8.2.
3
Sec.
150.
Section
423.3,
subsections
1,
2,
and
17,
Code
4
2018,
are
amended
to
read
as
follows:
5
1.
The
sales
price
from
sales
of
tangible
personal
property
,
6
specified
digital
products,
and
services
furnished
which
this
7
state
is
prohibited
from
taxing
under
the
Constitution
or
laws
8
of
the
United
States
or
under
the
Constitution
of
this
state.
9
2.
The
sales
price
of
sales
for
resale
of
tangible
personal
10
property
or
taxable
services,
or
for
resale
of
tangible
11
personal
property
in
connection
with
the
furnishing
of
taxable
12
services
,
except
for
sales,
the
following:
13
a.
Sales,
other
than
leases
or
rentals,
which
are
sales
14
to
nonqualified
dealers
of
machinery,
equipment,
attachments,
15
and
replacement
parts
specifically
enumerated
in
subsection
37
16
and
used
in
the
manner
described
in
subsection
37
or
the
.
For
17
purposes
of
this
paragraph,
“nonqualified
dealer”
means
any
18
dealer
who
is
not
a
party
to
a
dealership
agreement,
as
those
19
terms
are
defined
in
section
322F.1.
20
b.
The
purchase
of
tangible
personal
property,
the
leasing
21
or
rental
of
which
is
exempted
from
tax
by
subsection
49
.
22
17.
The
sales
price
of
all
goods,
wares,
or
merchandise,
23
tangible
personal
property,
specified
digital
products,
or
24
services,
used
for
educational
purposes
sold
to
any
private
25
nonprofit
educational
institution
in
this
state.
For
the
26
purpose
of
this
subsection
,
“educational
institution”
means
an
27
institution
which
primarily
functions
as
a
school,
college,
28
or
university
with
students,
faculty,
and
an
established
29
curriculum.
The
faculty
of
an
educational
institution
must
be
30
associated
with
the
institution
and
the
curriculum
must
include
31
basic
courses
which
are
offered
every
year.
“Educational
32
institution”
includes
an
institution
primarily
functioning
as
33
a
library.
34
Sec.
151.
Section
423.3,
subsection
3,
Code
2018,
is
amended
35
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_____
by
striking
the
subsection
and
inserting
in
lieu
thereof
the
1
following:
2
3.
a.
The
sales
price
of
tangible
personal
property
used
3
primarily
in
agricultural
production
by
a
commercial
farmer
4
if
the
cost
of
the
tangible
personal
property
is
properly
5
claimed
as
a
business
deduction
for
purposes
of
chapter
422
and
6
the
tangible
personal
property
is
used
on
land
eligible
for
7
the
agricultural
land
credit
created
in
chapter
426.
If
the
8
other
requirements
of
this
subsection
are
satisfied,
“tangible
9
personal
property”
includes
but
is
not
limited
to
the
following:
10
(1)
Farm
machinery
and
equipment,
including
supplies,
11
replacement
parts,
and
auxiliary
attachments
which
improve
the
12
performance,
safety,
operation,
or
efficiency
of
the
machinery
13
and
equipment.
14
(2)
Agricultural
breeding
livestock,
domesticated
fowl,
15
preserve
whitetail
as
defined
in
section
484C.1,
and
draft
16
horses.
17
b.
Vehicles
subject
to
registration,
as
defined
in
section
18
423.1,
and
replacement
parts
for
such
vehicles,
are
not
exempt
19
under
paragraph
“a”
of
this
subsection.
20
Sec.
152.
Section
423.3,
subsections
3A,
4,
5,
6,
7,
8,
21
9,
10,
11,
12,
13,
14,
15,
and
16,
Code
2018,
are
amended
by
22
striking
the
subsections.
23
Sec.
153.
Section
423.3,
subsection
18,
unnumbered
24
paragraph
1,
Code
2018,
is
amended
to
read
as
follows:
25
The
sales
price
of
tangible
personal
property
or
specified
26
digital
products
sold,
or
of
services
furnished,
to
the
27
following
nonprofit
corporations:
28
Sec.
154.
Section
423.3,
subsections
20,
21,
22,
23,
26,
27,
29
28,
and
31,
Code
2018,
are
amended
to
read
as
follows:
30
20.
The
sales
price
of
tangible
personal
property
or
31
specified
digital
products
sold,
or
of
services
furnished,
to
32
nonprofit
legal
aid
organizations.
33
21.
The
sales
price
of
goods,
wares,
or
merchandise,
34
tangible
personal
property,
of
specified
digital
products,
35
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_____
or
of
services,
used
for
educational,
scientific,
historic
1
preservation,
or
aesthetic
purpose
sold
to
a
nonprofit
private
2
museum.
3
22.
The
sales
price
from
sales
of
goods,
wares,
or
4
merchandise,
tangible
personal
property,
of
specified
digital
5
products,
or
from
services
furnished,
to
a
nonprofit
private
6
art
center
to
be
used
in
the
operation
of
the
art
center.
7
23.
The
sales
price
of
tangible
personal
property
or
8
specified
digital
products
sold,
or
of
services
furnished,
by
a
9
fair
organized
under
chapter
174
.
10
26.
The
sales
price
of
tangible
personal
property
or
11
specified
digital
products
sold,
or
of
services
furnished,
to
a
12
statewide
nonprofit
organ
procurement
organization,
as
defined
13
in
section
142C.2
.
14
27.
The
sales
price
of
tangible
personal
property
or
15
specified
digital
products
sold,
or
of
services
furnished,
to
a
16
nonprofit
hospital
licensed
pursuant
to
chapter
135B
to
be
used
17
in
the
operation
of
the
hospital.
18
28.
The
sales
price
of
tangible
personal
property
or
19
specified
digital
products
sold,
or
of
services
furnished,
to
20
a
freestanding
nonprofit
hospice
facility
which
operates
a
21
hospice
program
as
defined
in
42
C.F.R.
ch.
IV,
§418.3
,
which
22
property
or
services
are
to
be
used
in
the
hospice
program.
23
31.
a.
The
sales
price
of
goods,
wares,
or
merchandise
24
tangible
personal
property
or
specified
digital
products
sold
25
to
and
of
services
furnished,
and
used
for
public
purposes
26
sold
to
a
tax-certifying
or
tax-levying
body
of
the
state
or
27
a
governmental
subdivision
of
the
state,
including
regional
28
transit
systems,
as
defined
in
section
324A.1
,
the
state
board
29
of
regents,
department
of
human
services,
state
department
of
30
transportation,
any
municipally
owned
solid
waste
facility
31
which
sells
all
or
part
of
its
processed
waste
as
fuel
to
a
32
municipally
owned
public
utility,
and
all
divisions,
boards,
33
commissions,
agencies,
or
instrumentalities
of
state,
federal,
34
county,
or
municipal
government
which
have
no
earnings
going
to
35
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_____
the
benefit
of
an
equity
investor
or
stockholder,
except
any
1
of
the
following:
2
(1)
a.
The
sales
price
of
goods,
wares,
or
merchandise
3
tangible
personal
property
or
specified
digital
products
sold
4
to,
or
of
services
furnished,
and
used
by
or
in
connection
with
5
the
operation
of
any
municipally
owned
public
utility
engaged
6
in
selling
gas,
electricity,
heat,
pay
television
service,
or
7
communication
service
to
the
general
public.
8
(2)
b.
The
sales
price
of
furnishing
of
sewage
services
to
9
a
county
or
municipality
on
behalf
of
nonresidential
commercial
10
operations.
11
(3)
c.
The
furnishing
of
solid
waste
collection
and
12
disposal
service
to
a
county
or
municipality
on
behalf
of
13
nonresidential
commercial
operations
located
within
the
county
14
or
municipality.
15
b.
The
exemption
provided
by
this
subsection
shall
also
16
apply
to
all
such
sales
of
goods,
wares,
or
merchandise
or
of
17
services
furnished
and
subject
to
use
tax.
18
Sec.
155.
Section
423.3,
subsection
32,
unnumbered
19
paragraph
1,
Code
2018,
is
amended
to
read
as
follows:
20
The
sales
price
of
tangible
personal
property
or
specified
21
digital
products
sold,
or
of
services
furnished,
by
a
county
or
22
city.
This
exemption
does
not
apply
to
any
of
the
following:
23
Sec.
156.
Section
423.3,
subsection
36,
unnumbered
24
paragraph
1,
Code
2018,
is
amended
to
read
as
follows:
25
The
sales
price
from
sales
of
tangible
personal
property
26
or
specified
digital
products
or
of
the
sale
or
furnishing
of
27
electrical
energy,
natural
or
artificial
gas,
or
communication
28
service
to
another
state
or
political
subdivision
of
another
29
state
if
the
other
state
provides
a
similar
reciprocal
30
exemption
for
this
state
and
political
subdivision
of
this
31
state.
32
Sec.
157.
Section
423.3,
subsection
39,
paragraph
a,
33
subparagraphs
(1)
and
(2),
Code
2018,
are
amended
to
read
as
34
follows:
35
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_____
(1)
Sales
of
tangible
personal
property
or
specified
1
digital
products
,
or
the
furnishing
of
services,
of
a
2
nonrecurring
nature,
by
the
owner,
if
the
seller,
at
the
time
3
of
the
sale,
is
not
engaged
for
profit
in
the
business
of
4
selling
tangible
personal
property
,
specified
digital
products,
5
or
services
taxed
under
section
423.2
.
6
(2)
The
sale
of
all
or
substantially
all
of
the
tangible
7
personal
property
,
or
specified
digital
products,
or
services
8
held
or
used
by
a
seller
in
the
course
of
the
seller’s
trade
or
9
business
for
which
the
seller
is
required
to
hold
a
sales
tax
10
permit
when
the
seller
sells
or
otherwise
transfers
the
trade
11
or
business
to
another
person
who
shall
engage
in
a
similar
12
trade
or
business.
13
Sec.
158.
Section
423.3,
subsection
47,
paragraph
d,
14
subparagraph
(4),
Code
2018,
is
amended
by
striking
the
15
subparagraph
and
inserting
in
lieu
thereof
the
following:
16
(4)
(a)
“Manufacturer”
means
a
business
that
primarily
17
purchases,
receives,
or
holds
personal
property
of
any
18
description
for
the
purpose
of
adding
to
its
value
by
a
process
19
of
manufacturing
with
a
view
to
selling
the
property
for
gain
20
or
profit.
21
(b)
“Manufacturer”
includes
contract
manufacturers.
A
22
contract
manufacturer
is
a
manufacturer
that
otherwise
falls
23
within
the
definition
of
manufacturer,
except
that
a
contract
24
manufacturer
does
not
sell
the
tangible
personal
property
25
the
contract
manufacturer
processes
on
behalf
of
other
26
manufacturers.
27
(c)
For
purposes
of
this
subparagraph,
“business”
means
28
those
businesses
conducted
for
profit,
but
excludes
professions
29
and
occupations
and
nonprofit
organizations.
30
(d)
For
purposes
of
this
subparagraph,
“manufacturing”
31
means
those
activities
commonly
understood
within
the
ordinary
32
meaning
of
the
term,
and
shall
include:
33
(i)
Refining.
34
(ii)
Purifying.
35
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(iii)
Combining
of
different
materials.
1
(iv)
Packing
of
meats.
2
(v)
Activities
subsequent
to
the
extractive
process
of
3
quarrying
or
mining,
such
as
crushing,
washing,
sizing,
or
4
blending
of
aggregate
materials.
5
(e)
“Manufacturer”
does
not
include
persons
who
are
not
6
commonly
understood
as
manufacturers,
including
but
not
limited
7
to
persons
engaged
in
any
of
the
following
activities:
8
(i)
Construction
contracting.
9
(ii)
Repairing
tangible
personal
property
or
real
property.
10
(iii)
Providing
health
care.
11
(iv)
Farming,
including
cultivating
agricultural
products
12
and
raising
livestock.
13
(v)
Transporting
for
hire.
14
(vi)
Making
retail
sales
to
consumers.
15
Sec.
159.
Section
423.3,
subsection
63,
Code
2018,
is
16
amended
to
read
as
follows:
17
63.
The
sales
price
from
the
sale
of
tangible
personal
18
property
,
specified
digital
products,
or
services
which
will
be
19
given
as
prizes
to
players
in
games
of
skill,
games
of
chance,
20
raffles,
and
bingo
games
as
defined
in
chapter
99B
.
21
Sec.
160.
Section
423.3,
subsections
65,
66,
and
67,
Code
22
2018,
are
amended
by
striking
the
subsections.
23
Sec.
161.
Section
423.3,
subsection
78,
paragraph
a,
24
unnumbered
paragraph
1,
Code
2018,
is
amended
to
read
as
25
follows:
26
The
sales
price
from
sales
or
rental
the
sale
of
tangible
27
personal
property,
specified
digital
products,
or
services
28
rendered
by
any
entity
where
the
profits
from
the
sales
or
29
rental
sale
of
the
tangible
personal
property,
specified
30
digital
products,
or
services
rendered,
are
used
by
or
donated
31
to
a
nonprofit
entity
that
is
exempt
from
federal
income
32
taxation
pursuant
to
section
501(c)(3)
of
the
Internal
Revenue
33
Code,
a
government
entity,
or
a
nonprofit
private
educational
34
institution,
and
where
the
entire
proceeds
from
the
sales,
35
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_____
rental,
sale
or
services
are
expended
for
any
of
the
following
1
purposes:
2
Sec.
162.
Section
423.3,
subsection
79,
Code
2018,
is
3
amended
to
read
as
follows:
4
79.
The
sales
price
from
the
sale
or
rental
of
tangible
5
personal
property
or
specified
digital
products,
or
from
6
services
furnished
,
to
a
recognized
community
action
agency
as
7
provided
in
section
216A.93
to
be
used
for
the
purposes
of
the
8
agency.
9
Sec.
163.
Section
423.3,
Code
2018,
is
amended
by
adding
the
10
following
new
subsections:
11
NEW
SUBSECTION
.
103.
a.
The
sales
price
of
specified
12
digital
products
sold,
and
of
enumerated
services
described
in
13
section
423.2,
subsection
6,
paragraphs
“bq”
,
“br”
,
“bs”
,
and
14
“bu”
furnished,
to
a
commercial
enterprise
for
use
exclusively
15
by
the
commercial
enterprise.
The
use
of
a
specified
digital
16
product
or
service
fails
to
qualify
as
a
use
exclusively
by
the
17
commercial
enterprise
if
its
use
for
noncommercial
purposes
is
18
more
than
de
minimis.
19
b.
For
purposes
of
this
subsection:
20
(1)
“Commercial
enterprise”
means
the
same
as
defined
in
21
section
423.3,
subsection
47,
paragraph
“d”
,
subparagraph
(1).
22
(2)
“De
minimis”
and
“noncommercial
purposes”
shall
be
23
defined
by
the
director
by
rule.
24
NEW
SUBSECTION
.
104.
The
sales
price
of
specified
digital
25
products
sold
to
a
non-end
user.
For
purposes
of
this
26
subsection,
“non-end
user”
means
a
person
who
receives
by
27
contract
a
specified
digital
product
for
further
commercial
28
broadcast,
rebroadcast,
transmission,
retransmission,
29
licensing,
relicensing,
distribution,
redistribution,
or
30
exhibition
of
the
product,
in
whole
or
in
part,
to
another
31
person.
32
NEW
SUBSECTION
.
105.
The
sales
price
from
the
sale
of
a
33
grain
bin
or
materials
used
to
construct
a
grain
bin.
For
34
purposes
of
this
subsection,
“grain
bin”
means
property
that
is
35
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vented
and
covered
with
corrugated
metal
or
similar
material,
1
and
that
is
primarily
used
to
hold
loose
grain
for
drying
or
2
storage.
3
Sec.
164.
Section
423.4,
subsection
3,
unnumbered
paragraph
4
1,
Code
2018,
is
amended
to
read
as
follows:
5
A
relief
agency
may
apply
to
the
director
for
refund
of
the
6
amount
of
sales
or
use
tax
imposed
and
paid
upon
sales
to
it
7
of
any
goods,
wares,
merchandise,
tangible
personal
property
8
or
specified
digital
products,
or
services
furnished,
used
for
9
free
distribution
to
the
poor
and
needy.
10
Sec.
165.
Section
423.4,
subsection
3,
paragraph
a,
11
subparagraph
(1),
Code
2018,
is
amended
to
read
as
follows:
12
(1)
On
forms
furnished
by
the
department,
and
filed
within
13
the
time
as
the
director
shall
provide
by
rule,
the
relief
14
agency
shall
report
to
the
department
the
total
amount
or
15
amounts,
valued
in
money,
expended
directly
or
indirectly
16
for
goods,
wares,
merchandise,
tangible
personal
property
or
17
specified
digital
products,
or
services
furnished,
used
for
18
free
distribution
to
the
poor
and
needy.
19
Sec.
166.
Section
423.4,
subsection
10,
paragraph
e,
Code
20
2018,
is
amended
to
read
as
follows:
21
e.
There
is
established
within
the
state
treasury
under
the
22
control
of
the
department
a
baseball
and
softball
complex
sales
23
tax
rebate
fund
consisting
of
the
amount
of
state
sales
tax
24
revenues
transferred
pursuant
to
section
423.2,
subsection
11
,
25
paragraph
“b”
,
subparagraph
(4)
423.2A,
subsection
2,
paragraph
26
“d”
.
An
account
is
created
within
the
fund
for
each
baseball
27
and
softball
complex
receiving
an
award
under
section
15F.207
28
and
meeting
the
qualifications
of
this
subsection
.
Moneys
29
in
the
fund
shall
only
be
used
to
provide
rebates
of
state
30
sales
tax
pursuant
to
this
subsection
,
and
only
the
state
sales
31
tax
revenues
in
the
baseball
and
softball
complex
rebate
fund
32
are
subject
to
rebate
under
this
subsection
.
The
amount
of
33
rebates
paid
from
each
baseball
and
softball
complex’s
account
34
within
the
fund
shall
not
exceed
the
amount
of
the
award
under
35
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section
15F.207
,
and
not
more
than
five
million
dollars
in
1
total
rebates
shall
be
paid
from
the
fund.
Any
moneys
in
the
2
fund
which
represent
state
sales
tax
revenue
for
which
the
time
3
period
in
paragraph
“c”
for
receiving
a
rebate
has
expired,
4
or
which
otherwise
represent
state
sales
tax
revenue
that
has
5
become
ineligible
for
rebate
pursuant
to
this
subsection
,
shall
6
immediately
revert
to
the
general
fund
of
this
state.
7
Sec.
167.
Section
423.4,
subsection
11,
paragraph
b,
8
subparagraph
(1),
Code
2018,
is
amended
to
read
as
follows:
9
(1)
Sales
tax
imposed
and
collected
by
retailers
upon
10
sales
of
tangible
personal
property
or
services
furnished
to
11
purchasers
at
the
raceway
facility.
Notwithstanding
the
state
12
sales
tax
imposed
in
section
423.2
,
a
sales
tax
rebate
issued
13
pursuant
to
this
subparagraph
shall
not
exceed
the
amounts
14
transferred
to
the
raceway
facility
tax
rebate
fund
pursuant
to
15
section
423.2,
subsection
11
,
paragraph
“b”
,
subparagraph
(7)
16
423.2A,
subsection
2,
paragraph
“g”
.
17
Sec.
168.
Section
423.4,
subsection
11,
paragraph
b,
18
subparagraph
(2),
subparagraph
division
(c),
Code
2018,
is
19
amended
to
read
as
follows:
20
(c)
Notwithstanding
the
state
sales
tax
imposed
in
section
21
423.2
,
a
sales
tax
rebate
issued
pursuant
to
this
subparagraph
22
shall
not
exceed
the
amounts
remaining
after
the
transfers
23
required
under
section
423.2,
subsection
11
,
paragraph
“b”
,
24
subparagraphs
(1)
through
(6)
423.2A,
subsection
2,
paragraphs
25
“a”
through
“f”
,
have
been
made
from
the
total
amount
of
sales
26
tax
for
which
the
rebate
is
requested.
27
Sec.
169.
Section
423.4,
subsection
11,
paragraph
e,
Code
28
2018,
is
amended
to
read
as
follows:
29
e.
There
is
established
within
the
state
treasury
under
30
the
control
of
the
department
a
raceway
facility
tax
rebate
31
fund
consisting
of
the
amount
of
state
sales
tax
revenues
32
transferred
pursuant
to
section
423.2,
subsection
11
,
paragraph
33
“b”
,
subparagraph
(7)
423.2A,
subsection
2,
paragraph
“g”
.
An
34
account
is
created
within
the
fund
for
each
raceway
facility
35
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meeting
the
qualifications
of
this
subsection
.
Moneys
in
the
1
fund
shall
only
be
used
to
provide
rebates
of
state
sales
tax
2
pursuant
to
paragraph
“b”
,
subparagraph
(1).
The
total
amount
3
of
rebates
paid
from
the
fund
shall
not
exceed
the
amount
4
specified
in
paragraph
“c”
,
subparagraph
(4),
subparagraph
5
division
(a)
or
(b),
whichever
is
applicable.
Any
moneys
in
6
the
fund
which
represent
state
sales
tax
revenue
for
which
the
7
time
period
in
paragraph
“c”
for
receiving
a
rebate
has
expired,
8
or
which
otherwise
represent
state
sales
tax
revenue
that
has
9
become
ineligible
for
rebate
pursuant
to
this
subsection
shall
10
immediately
revert
to
the
general
fund
of
the
state.
11
Sec.
170.
Section
423.5,
subsection
1,
paragraph
a,
Code
12
2018,
is
amended
to
read
as
follows:
13
a.
The
use
in
this
state
of
tangible
personal
property
14
as
defined
in
section
423.1
,
including
aircraft
subject
to
15
registration
under
section
328.20
,
purchased
for
use
in
this
16
state.
For
the
purposes
of
this
subchapter
,
the
furnishing
17
or
use
of
the
following
services
is
also
treated
as
the
use
18
of
tangible
personal
property:
optional
service
or
warranty
19
contracts,
except
residential
service
contracts
regulated
under
20
chapter
523C
,
vulcanizing,
recapping,
or
retreading
services,
21
engraving,
photography,
retouching,
printing,
or
binding
22
services,
and
communication
service
when
furnished
or
delivered
23
to
consumers
or
users
within
this
state.
24
Sec.
171.
Section
423.5,
subsection
1,
paragraph
d,
Code
25
2018,
is
amended
to
read
as
follows:
26
d.
Purchases
of
tangible
personal
property
or
specified
27
digital
products
made
from
the
government
of
the
United
States
28
or
any
of
its
agencies
by
ultimate
consumers
shall
be
subject
29
to
the
tax
imposed
by
this
section
.
Services
purchased
from
30
the
same
source
or
sources
shall
be
subject
to
the
service
31
tax
imposed
by
this
subchapter
and
apply
to
the
user
of
the
32
services.
33
Sec.
172.
Section
423.5,
subsection
1,
Code
2018,
is
amended
34
by
adding
the
following
new
paragraph:
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NEW
PARAGRAPH
.
f.
(1)
The
use
in
this
state
of
specified
1
digital
products.
The
tax
applies
whether
the
purchaser
2
obtains
permanent
use
or
less
than
permanent
use
of
the
3
specified
digital
product,
whether
the
use
is
conditioned
or
4
not
conditioned
upon
continued
payment
from
the
purchaser,
5
and
whether
the
use
is
on
a
subscription
basis
or
is
not
on
a
6
subscription
basis.
7
(2)
The
use
of
a
digital
code
that
may
be
used
to
obtain
8
or
access
a
specified
digital
product
shall
be
taxed
in
the
9
same
manner
as
the
specified
digital
product.
For
purposes
of
10
this
subparagraph,
“digital
code”
means
the
same
as
defined
in
11
section
423.2,
subsection
9A.
12
Sec.
173.
Section
423.5,
subsection
3,
Code
2018,
is
amended
13
to
read
as
follows:
14
3.
For
the
purpose
of
the
proper
administration
of
the
use
15
tax
and
to
prevent
its
evasion,
evidence
that
tangible
personal
16
property
was
or
specified
digital
products
were
sold
by
any
17
person
for
delivery
in
this
state
shall
be
prima
facie
evidence
18
that
such
tangible
personal
property
was
or
specified
digital
19
products
were
sold
for
use
in
this
state.
20
Sec.
174.
Section
423.5,
subsection
4,
Code
2018,
is
amended
21
by
striking
the
subsection.
22
Sec.
175.
Section
423.6,
unnumbered
paragraph
1,
Code
2018,
23
is
amended
to
read
as
follows:
24
The
use
in
this
state
of
the
following
tangible
personal
25
property
,
specified
digital
products,
and
services
is
exempted
26
from
the
tax
imposed
by
this
subchapter
:
27
Sec.
176.
Section
423.6,
subsections
1,
2,
4,
and
6,
Code
28
2018,
are
amended
to
read
as
follows:
29
1.
Tangible
personal
property
,
specified
digital
products,
30
and
enumerated
services,
the
sales
price
from
the
sale
of
which
31
are
required
to
be
included
in
the
measure
of
the
sales
tax,
if
32
that
tax
has
been
paid
to
the
department
or
the
retailer.
This
33
exemption
does
not
include
vehicles
subject
to
registration
or
34
subject
only
to
the
issuance
of
a
certificate
of
title.
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2.
The
sale
of
tangible
personal
property
,
specified
1
digital
products,
or
the
furnishing
of
services
in
the
regular
2
course
of
business.
3
4.
All
articles
of
tangible
personal
property
and
all
4
specified
digital
products
brought
into
the
state
of
Iowa
by
a
5
nonresident
individual
for
the
individual’s
use
or
enjoyment
6
while
within
the
state.
7
6.
Tangible
personal
property
,
specified
digital
products,
8
or
services
the
sales
price
of
which
is
exempt
from
the
sales
9
tax
under
section
423.3
,
except
section
423.3,
subsections
39
10
and
73
,
as
it
relates
to
the
sale,
but
not
the
lease
or
rental,
11
of
vehicles
subject
only
to
the
issuance
of
a
certificate
of
12
title
and
as
it
relates
to
aircraft
subject
to
registration
13
under
section
328.20
.
14
Sec.
177.
Section
423.14,
subsection
2,
paragraphs
b
and
c,
15
Code
2018,
are
amended
to
read
as
follows:
16
b.
The
tax
upon
the
use
of
all
tangible
personal
property
17
and
specified
digital
products
other
than
that
enumerated
in
18
paragraph
“a”
,
which
is
sold
by
a
seller
who
is
a
retailer
19
maintaining
a
place
of
business
in
this
state,
or
by
such
other
20
retailer
or
agent
as
the
director
shall
authorize
pursuant
to
21
section
423.30
or
its
agent
that
is
not
otherwise
required
22
to
collect
sales
tax
under
the
provisions
of
this
chapter
,
23
shall
be
collected
by
the
retailer
or
agent
and
remitted
to
the
24
department,
pursuant
to
the
provisions
of
paragraph
“e”
,
and
25
sections
423.24
,
423.29
,
423.30
,
423.32
,
and
423.33
.
26
c.
The
tax
upon
the
use
of
all
tangible
personal
property
27
and
specified
digital
products
not
paid
pursuant
to
paragraphs
28
“a”
and
“b”
shall
be
paid
to
the
department
directly
by
any
29
person
using
the
property
within
this
state,
pursuant
to
the
30
provisions
of
section
423.34
.
31
Sec.
178.
NEW
SECTION
.
423.14A
Persons
required
to
collect
32
sales
and
use
tax
——
supplemental
conditions,
requirements,
and
33
responsibilities.
34
1.
For
purposes
of
this
section,
“Iowa
sales”
means
sales
35
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of
tangible
personal
property,
services,
or
specified
digital
1
products
sourced
to
this
state
pursuant
to
section
423.15,
2
423.16,
423.17,
423.19,
or
423.20,
or
that
are
otherwise
sold
3
in
this
state
or
for
delivery
into
this
state.
4
2.
In
addition
to
and
not
in
lieu
of
any
application
of
5
this
chapter
to
sellers
who
are
retailers
and
sellers
who
are
6
retailers
maintaining
a
place
of
business
in
this
state,
any
7
person
described
in
subsection
3,
or
the
person’s
agents,
8
shall
be
considered
a
retailer
in
this
state
and
a
retailer
9
maintaining
a
place
of
business
in
this
state
for
purposes
of
10
this
chapter
on
or
after
January
1,
2019,
and
shall
be
subject
11
to
all
requirements
of
this
chapter
imposed
on
retailers
and
12
retailers
maintaining
a
place
of
business
in
this
state,
13
including
but
not
limited
to
the
requirement
to
collect
and
14
remit
sales
and
use
taxes
pursuant
to
sections
423.14
and
15
423.29,
and
local
option
taxes
under
chapter
423B.
16
3.
a.
A
retailer
that
has
gross
revenue
from
Iowa
sales
17
equal
to
or
exceeding
one
hundred
thousand
dollars
for
the
18
immediately
preceding
calendar
year
or
the
current
calendar
19
year.
20
b.
A
retailer
that
makes
Iowa
sales
in
two
hundred
or
more
21
separate
transactions
for
the
immediately
preceding
calendar
22
year
or
the
current
calendar
year.
23
c.
(1)
A
retailer
that
owns,
licenses,
or
uses
software
24
or
data
files
that
are
installed
or
stored
on
property
used
25
in
this
state.
For
purposes
of
this
subparagraph,
“software
26
or
data
files”
include
but
are
not
limited
to
software
that
is
27
affirmatively
downloaded
by
a
user,
software
that
is
downloaded
28
as
a
result
of
the
use
of
a
website,
preloaded
software,
and
29
cookies.
30
(2)
A
retailer
that
uses
in-state
software
to
make
Iowa
31
sales.
For
purposes
of
this
subparagraph,
“in-state
software”
32
means
computer
software
that
is
stored
on
property
located
in
33
this
state
or
that
is
distributed
within
this
state
for
the
34
purpose
of
facilitating
a
sale
by
the
retailer.
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(3)
A
retailer
that
provides,
or
enters
into
an
agreement
1
with
another
person
to
provide,
a
content
distribution
network
2
in
this
state
to
facilitate,
accelerate,
or
enhance
the
3
delivery
of
the
retailer’s
internet
site
to
purchasers.
For
4
purposes
of
this
subparagraph,
“content
distribution
network”
5
means
a
system
of
distributed
servers
that
deliver
internet
6
sites
and
other
internet
content
to
a
user
based
on
the
7
geographic
location
of
the
user,
the
origin
of
the
internet
8
site
or
internet
content,
and
a
content
delivery
server.
9
(4)
This
paragraph
“c”
shall
not
apply
to
a
retailer
that
10
has
gross
revenue
from
Iowa
sales
of
less
than
one
hundred
11
thousand
dollars
for
the
immediately
preceding
calendar
year
12
or
the
current
calendar
year.
13
d.
(1)
A
retailer
that
makes
Iowa
sales
through
a
14
marketplace
provider.
This
subparagraph
shall
not
apply
to
a
15
retailer
that
has
gross
revenue
from
Iowa
sales
of
less
than
16
ten
thousand
dollars
for
the
immediately
preceding
calendar
17
year
or
the
current
calendar
year.
18
(2)
A
marketplace
provider
that
makes
or
facilitates
Iowa
19
sales
for
one
or
more
retailers
equal
to
or
exceeding
one
20
hundred
thousand
dollars,
or
in
two
hundred
or
more
separate
21
transactions,
for
the
immediately
preceding
calendar
year
or
22
the
current
calendar
year.
23
(3)
Retailers
and
marketplace
providers
subject
to
this
24
paragraph
may
enter
into
agreements
regarding
the
fulfillment
25
of
the
requirements
of
this
chapter.
26
(4)
A
marketplace
provider
shall
collect
sales
and
use
tax
27
on
the
entire
sales
price
or
purchase
price
paid
by
a
purchaser
28
on
each
Iowa
sale
made
or
facilitated
by
the
marketplace
29
provider
that
is
subject
to
sales
and
use
tax,
regardless
of
30
the
amount
of
the
sales
price
or
purchase
price
that
will
31
ultimately
accrue
to
or
benefit
the
marketplace
provider,
32
another
retailer,
or
any
other
person.
This
sales
and
use
tax
33
collection
responsibility
of
a
marketplace
provider
applies
but
34
shall
not
be
limited
to
sales
facilitated
through
a
computer
35
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software
application,
commonly
referred
to
as
in-app
purchases,
1
or
through
a
specified
digital
product.
2
(5)
If
a
retail
sale
subject
to
the
sales
and
use
tax
3
involves
both
a
marketplace
provider
and
another
retailer
4
that
is
required
to
collect
and
remit
sales
and
use
tax,
5
the
marketplace
provider
and
any
other
retailer
involved
in
6
the
transaction
shall
be
jointly
and
severally
liable
for
7
collecting
and
remitting
sales
and
use
tax
under
this
chapter.
8
(6)
(a)
For
purposes
of
this
paragraph,
“marketplace
9
provider”
means
a
person
who
facilitates
a
retail
sale
by
10
satisfying
subparagraph
divisions
(i)
and
(ii)
as
follows:
11
(i)
The
person
directly
or
indirectly
does
any
of
the
12
following:
13
(A)
Lists,
makes
available,
or
advertises
tangible
personal
14
property,
services,
or
specified
digital
products
for
sale
by
a
15
retailer
in
any
forum.
16
(B)
Transmits
or
otherwise
communicates
an
offer
or
17
acceptance
of
a
retail
sale
of
tangible
personal
property,
18
services,
or
specified
digital
products
between
a
retailer
and
19
a
purchaser.
20
(C)
Owns,
rents,
licenses,
makes
available,
or
operates
21
any
electronic
or
physical
infrastructure
or
any
property,
22
process,
method,
copyright,
trademark,
or
patent
that
connects
23
retailers
to
purchasers
for
the
purpose
of
making
retail
sales
24
of
tangible
personal
property,
services,
or
specified
digital
25
products.
26
(D)
Provides
a
platform
or
other
marketplace
for
making
27
retail
sales
of
tangible
personal
property,
services,
or
28
specified
digital
products,
or
otherwise
facilitates
retail
29
sales
of
tangible
personal
property,
services,
or
specified
30
digital
products,
regardless
of
ownership
or
control
of
the
31
tangible
personal
property,
services,
or
specified
digital
32
products
that
are
the
subject
of
the
retail
sale.
33
(E)
Provides
software
development
or
research
and
34
development
activities
related
to
any
activity
described
in
35
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this
subparagraph
subdivision
(i),
if
such
software
development
1
or
research
and
development
activities
are
directly
related
2
to
the
physical
or
electronic
marketplace
provided
by
a
3
marketplace
provider.
4
(F)
Provides
or
offers
fulfillment
or
storage
services
for
5
a
retailer.
6
(G)
Sets
prices
for
a
retailer’s
sale
of
tangible
personal
7
property,
services,
or
specified
digital
products.
8
(H)
Provides
or
offers
customer
service
to
a
retailer
or
9
a
retailer’s
customers,
or
accepts
or
assists
with
returns
or
10
exchanges
of
tangible
personal
property,
services,
or
specified
11
digital
products
sold
by
a
retailer.
12
(ii)
The
person
directly
or
indirectly
does
any
of
the
13
following:
14
(A)
Collects
the
sales
price
or
purchase
price
of
a
retail
15
sale
of
tangible
personal
property,
services,
or
specified
16
digital
products.
17
(B)
Provides
payment
processing
services
for
a
retail
sale
18
of
tangible
personal
property,
services,
or
specified
digital
19
products.
20
(C)
Charges,
collects,
or
otherwise
receives
selling
21
fees,
listing
fees,
referral
fees,
closing
fees,
fees
for
22
inserting
or
making
available
tangible
personal
property,
23
services,
or
specified
digital
products
on
a
marketplace,
or
24
other
consideration
from
the
facilitation
of
a
retail
sale
of
25
tangible
personal
property,
services,
or
specified
digital
26
products,
regardless
of
ownership
or
control
of
the
tangible
27
personal
property,
services,
or
specified
digital
products
that
28
are
the
subject
of
the
retail
sale.
29
(D)
Through
terms
and
conditions,
agreements,
or
30
arrangements
with
a
third
party,
collects
payment
in
connection
31
with
a
retail
sale
of
tangible
personal
property,
services,
32
or
specified
digital
products
from
a
purchaser
and
transmits
33
that
payment
to
the
retailer,
regardless
of
whether
the
person
34
collecting
and
transmitting
such
payment
receives
compensation
35
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or
other
consideration
in
exchange
for
the
service.
1
(E)
Provides
a
virtual
currency
that
purchasers
are
allowed
2
or
required
to
use
to
purchase
tangible
personal
property,
3
services,
or
specified
digital
products.
4
(b)
For
purposes
of
this
paragraph,
“marketplace
provider”
5
includes
but
is
not
limited
to
a
digital
distribution
service,
6
digital
distribution
platform,
online
portal,
or
an
application
7
store.
8
e.
(1)
A
retailer
that
makes
Iowa
sales
through
the
use
of
9
a
solicitor.
For
purposes
of
this
paragraph,
“solicitor”
means
10
a
person
that
directly
or
indirectly
solicits
business
for
a
11
retailer.
12
(2)
(a)
A
retailer
is
deemed
to
have
a
solicitor
in
13
this
state
if
the
retailer
enters
into
an
agreement
with
a
14
resident
under
which
the
resident,
for
a
commission,
fee,
or
15
other
similar
consideration,
directly
or
indirectly
refers
16
potential
customers,
whether
by
link
on
an
internet
site,
17
or
otherwise,
to
the
retailer.
This
determination
may
be
18
rebutted
by
a
showing
of
proof
that
the
resident
with
whom
the
19
retailer
has
an
agreement
did
not
engage
in
any
solicitation
20
in
this
state
on
behalf
of
the
retailer
that
would
satisfy
the
21
nexus
requirement
of
the
United
States
Constitution
during
the
22
calendar
year
in
question.
23
(b)
This
subparagraph
(2)
shall
not
apply
to
a
retailer
that
24
has
Iowa
gross
revenue
from
Iowa
sales
of
ten
thousand
dollars
25
or
less
for
the
immediately
preceding
calendar
year
or
the
26
current
calendar
year.
27
(c)
For
purposes
of
this
subparagraph
(2):
28
(i)
“Iowa
gross
revenue”
means
gross
revenue
from
Iowa
29
sales
to
purchasers
who
were
referred
to
the
retailer
by
all
30
solicitors
who
are
residents.
31
(ii)
“Resident”
includes
an
individual
who
is
a
resident
32
of
this
state,
as
defined
in
section
422.4,
and
any
business
33
that
owns
any
tangible
or
intangible
property
with
a
situs
in
34
this
state,
or
that
has
one
or
more
employees
performing
or
35
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_____
providing
services
for
the
business
in
this
state.
1
(d)
This
paragraph
“e”
does
not
apply
to
chapter
422
and
2
does
not
expand
or
contract
the
state’s
jurisdiction
to
tax
a
3
trade
or
business
under
chapter
422.
4
f.
A
retailer
that
owns,
controls,
rents,
licenses,
makes
5
available,
or
uses
any
tangible
or
intangible
property
in
this
6
state
or
with
a
situs
in
this
state,
to
make
or
otherwise
7
facilitate
a
retail
sale.
8
g.
(1)
Any
person
that
enters
into
a
contract
or
agreement
9
with
a
governmental
entity,
including
but
not
limited
to
10
contracts
for
the
provision
of
financial
assistance
or
11
incentives
such
as
a
tax
credit,
forgivable
loan,
grant,
tax
12
rebate,
or
any
other
thing
of
value.
For
purposes
of
this
13
subparagraph,
“governmental
entity”
means
any
unit
of
government
14
in
the
executive,
legislative,
or
judicial
branch,
or
any
15
political
subdivision
of
the
state,
including
but
not
limited
16
to
a
city,
county,
township,
or
school
district.
17
(2)
Every
bid
submitted
and
each
contract
or
agreement
18
executed
by
a
state
agency
shall
contain
a
certification
by
19
the
bidder
or
contractor
stating
that
the
bidder
or
contractor
20
is
registered
with
the
department
pursuant
to
this
chapter
21
and
will
collect
and
remit
Iowa
sales
and
use
tax
due
under
22
this
chapter.
In
the
certification,
the
bidder
or
contractor
23
shall
also
acknowledge
that
the
state
agency
may
declare
the
24
contractor
or
bid
void
if
the
certification
is
false
or
becomes
25
false.
Fraudulent
certification,
by
act
or
omission,
may
26
result
in
the
state
agency
or
its
representative
filing
for
27
damages
for
breach
of
contract.
28
h.
Any
affiliate
of
any
retailer
that
is
required
to
collect
29
and
remit
sales
and
use
tax
under
this
chapter,
provided
the
30
affiliate
makes
retail
sales.
31
Sec.
179.
Section
423.15,
unnumbered
paragraph
1,
Code
32
2018,
is
amended
to
read
as
follows:
33
All
sales
of
products
tangible
personal
property,
services,
34
or
specified
digital
products
,
except
those
sales
enumerated
35
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in
section
423.16
,
shall
be
sourced
according
to
this
section
1
by
sellers
obligated
to
collect
Iowa
sales
and
use
tax.
The
2
sourcing
rules
described
in
this
section
apply
to
sales
of
3
tangible
personal
property,
specified
digital
goods
products
,
4
and
all
services
other
than
telecommunications
services.
This
5
section
only
applies
to
determine
a
seller’s
obligation
to
pay
6
or
collect
and
remit
a
Iowa
sales
or
use
tax
with
respect
to
7
the
seller’s
sale
of
a
product.
This
section
does
not
affect
8
the
obligation
of
a
purchaser
or
lessee
to
remit
tax
on
the
use
9
of
the
product
to
the
taxing
jurisdictions
in
which
the
use
10
occurs.
A
seller’s
obligation
to
collect
Iowa
sales
tax
or
11
Iowa
use
tax
only
occurs
if
the
sale
is
sourced
to
this
state.
12
Whether
Iowa
sales
tax
applies
to
a
sale
sourced
to
Iowa
shall
13
be
determined
based
on
the
location
at
which
the
sale
is
14
consummated
by
delivery
or,
in
the
case
of
a
service,
where
the
15
first
use
of
the
service
occurs
made
by
a
seller
subject
to
16
section
423.1,
subsection
48,
or
section
423.14A
.
17
Sec.
180.
Section
423.15,
subsection
1,
paragraph
e,
Code
18
2018,
is
amended
to
read
as
follows:
19
e.
When
paragraphs
“a”
,
“b”
,
“c”
,
and
“d”
do
not
apply,
20
including
the
circumstance
where
the
seller
is
without
21
sufficient
information
to
apply
the
previous
rules,
then
the
22
location
will
be
determined
by
the
address
from
which
tangible
23
personal
property
was
shipped,
from
which
the
specified
digital
24
good
product
or
the
computer
software
delivered
electronically
25
was
first
available
for
transmission
by
the
seller,
or
from
26
which
the
service
was
provided
disregarding
for
these
purposes
27
any
location
that
merely
provided
the
digital
transfer
of
the
28
product
sold.
29
Sec.
181.
Section
423.22,
Code
2018,
is
amended
to
read
as
30
follows:
31
423.22
Taxation
in
another
state.
32
If
any
person
who
causes
tangible
personal
property
or
33
specified
digital
products
to
be
brought
into
this
state
or
34
who
uses
in
this
state
services
enumerated
in
section
423.2
35
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has
already
paid
a
tax
in
another
state
in
respect
to
the
sale
1
or
use
of
the
property
or
the
performance
of
the
service,
or
2
an
occupation
tax
in
respect
to
the
property
or
service,
in
3
an
amount
less
than
the
tax
imposed
by
subchapter
II
or
III
,
4
the
provisions
of
those
subchapters
shall
apply,
but
at
a
rate
5
measured
by
the
difference
only
between
the
rate
fixed
by
6
subchapter
II
or
III
and
the
rate
by
which
the
previous
tax
on
7
the
sale
or
use,
or
the
occupation
tax,
was
computed.
If
the
8
tax
imposed
and
paid
in
the
other
state
is
equal
to
or
more
than
9
the
tax
imposed
by
those
subchapters,
then
a
tax
is
not
due
in
10
this
state
on
the
personal
property
or
service.
11
Sec.
182.
Section
423.29,
subsection
1,
Code
2018,
is
12
amended
to
read
as
follows:
13
1.
Every
seller
who
is
a
retailer
and
who
is
making
taxable
14
sales
of
tangible
personal
property
or
specified
digital
15
products
in
Iowa
shall,
at
the
time
of
selling
the
property
16
making
the
sale
,
collect
the
sales
tax.
Every
seller
who
17
is
a
retailer
maintaining
a
place
of
business
in
this
state
18
that
is
not
otherwise
required
to
collect
sales
tax
under
the
19
provisions
of
this
chapter
and
who
is
selling
tangible
personal
20
property
or
specified
digital
products
for
use
in
Iowa
shall,
21
at
the
time
of
making
the
sale,
whether
within
or
without
the
22
state,
collect
the
use
tax.
Sellers
required
to
collect
sales
23
or
use
tax
shall
give
to
any
purchaser
a
receipt
for
the
tax
24
collected
in
the
manner
and
form
prescribed
by
the
director.
25
Sec.
183.
Section
423.30,
subsection
1,
Code
2018,
is
26
amended
to
read
as
follows:
27
1.
The
director
may,
upon
application,
authorize
the
28
collection
of
the
use
tax
by
any
seller
who
is
a
retailer
not
29
maintaining
a
place
of
business
within
this
state
and
not
30
registered
under
the
agreement,
who,
to
the
satisfaction
of
31
the
director,
furnishes
adequate
security
to
ensure
collection
32
and
payment
of
the
tax.
Such
sellers
shall
be
issued,
without
33
charge,
permits
to
collect
tax
subject
to
any
regulations
34
which
the
director
shall
prescribe.
When
so
authorized,
it
35
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shall
be
the
duty
of
foreign
sellers
to
collect
the
tax
upon
1
all
tangible
personal
property
and
specified
digital
products
2
sold,
to
the
retailer’s
knowledge,
for
use
within
this
state,
3
in
the
same
manner
and
subject
to
the
same
requirements
as
a
4
retailer
maintaining
a
place
of
business
within
this
state.
5
The
authority
and
permit
may
be
canceled
when,
at
any
time,
the
6
director
considers
the
security
inadequate,
or
that
tax
can
7
more
effectively
be
collected
from
the
person
using
property
8
in
this
state.
9
Sec.
184.
Section
423.31,
subsection
1,
Code
2018,
is
10
amended
to
read
as
follows:
11
1.
Each
person
subject
to
this
section
and
section
423.36
12
and
in
accordance
with
the
provisions
of
this
section
and
13
section
423.36
shall,
on
or
before
the
last
day
of
the
month
14
following
the
close
of
each
calendar
quarter
during
which
15
such
person
is
or
has
become
or
ceased
being
subject
to
the
16
provisions
of
this
section
and
section
423.36
,
make,
sign,
and
17
file
a
return
for
the
calendar
quarter
in
the
form
as
may
be
18
required.
Returns
shall
show
information
relating
to
sales
19
prices
including
goods,
wares,
tangible
personal
property,
20
specified
digital
products,
and
services
converted
to
the
21
use
of
such
person,
the
amounts
of
sales
prices
excluded
and
22
exempt
from
the
tax,
the
amounts
of
sales
prices
subject
to
23
tax,
a
calculation
of
tax
due,
and
any
other
information
for
24
the
period
covered
by
the
return
as
may
be
required.
Returns
25
shall
be
signed
by
the
retailer
or
the
retailer’s
authorized
26
agent
and
must
be
certified
by
the
retailer
to
be
correct
in
27
accordance
with
forms
and
rules
prescribed
by
the
director.
28
Sec.
185.
Section
423.31,
subsection
5,
paragraph
a,
Code
29
2018,
is
amended
to
read
as
follows:
30
a.
Upon
making
application
and
receiving
approval
from
31
the
director,
a
parent
corporation
person
and
its
affiliated
32
corporations
affiliates
that
make
retail
sales
of
tangible
33
personal
property
,
specified
digital
products,
or
taxable
34
enumerated
services
may
make
deposits
and
file
a
consolidated
35
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sales
tax
return
for
the
affiliated
group,
pursuant
to
rules
1
adopted
by
the
director.
A
parent
corporation
person
and
each
2
affiliate
corporation
that
files
a
consolidated
return
are
3
jointly
and
severally
liable
for
all
tax,
penalty,
and
interest
4
found
due
for
the
tax
period
for
which
a
consolidated
return
is
5
filed
or
required
to
be
filed.
6
Sec.
186.
Section
423.32,
subsection
1,
paragraph
b,
Code
7
2018,
is
amended
to
read
as
follows:
8
b.
The
deposit
form
is
due
on
or
before
the
twentieth
day
of
9
the
month
following
the
month
of
collection,
except
a
deposit
10
is
not
required
for
the
third
month
of
the
calendar
quarter,
11
and
the
total
quarterly
amount,
less
the
amounts
deposited
for
12
the
first
two
months
of
the
quarter,
is
due
with
the
quarterly
13
report
on
the
last
day
of
the
month
following
the
month
of
14
collection.
At
that
time,
the
retailer
shall
file
with
the
15
department
a
return
for
the
preceding
quarterly
period
in
the
16
form
prescribed
by
the
director
showing
the
purchase
price
of
17
the
tangible
personal
property
,
specified
digital
products,
and
18
services
sold
by
the
retailer
during
the
preceding
quarterly
19
period,
the
use
of
which
is
subject
to
the
use
tax
imposed
20
by
this
chapter
,
and
other
information
the
director
deems
21
necessary
for
the
proper
administration
of
the
use
tax.
22
Sec.
187.
Section
423.33,
subsection
3,
Code
2018,
is
23
amended
to
read
as
follows:
24
3.
Event
sponsor’s
liability
for
sales
tax.
A
person
25
sponsoring
a
flea
market
or
a
craft,
antique,
coin,
or
stamp
26
show
or
similar
event
shall
obtain
from
every
retailer
selling
27
tangible
personal
property
,
specified
digital
products,
28
or
taxable
services
at
the
event
proof
that
the
retailer
29
possesses
a
valid
sales
tax
permit
or
secure
from
the
retailer
30
a
statement,
taken
in
good
faith,
that
tangible
personal
31
property
,
specified
digital
products,
or
services
offered
for
32
sale
are
not
subject
to
sales
tax.
Failure
to
do
so
renders
33
a
sponsor
of
the
event
liable
for
payment
of
any
sales
tax,
34
interest,
and
penalty
due
and
owing
from
any
retailer
selling
35
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property
or
services
at
the
event.
Sections
423.31
,
423.32
,
1
423.37
,
423.38
,
423.39
,
423.40
,
423.41
,
and
423.42
apply
to
the
2
sponsors.
For
purposes
of
this
subsection
,
a
“person
sponsoring
3
a
flea
market
or
a
craft,
antique,
coin,
or
stamp
show
or
similar
4
event”
does
not
include
an
organization
which
sponsors
an
5
event
determined
to
qualify
as
an
event
involving
casual
sales
6
pursuant
to
section
423.3,
subsection
39
,
or
the
state
fair
or
7
a
fair
as
defined
in
section
174.1
.
8
Sec.
188.
Section
423.33,
Code
2018,
is
amended
by
adding
9
the
following
new
subsection:
10
NEW
SUBSECTION
.
4.
Liability
of
affiliates.
11
a.
Notwithstanding
any
other
provision
of
law
to
the
12
contrary,
if
any
retailer
required
to
collect
and
remit
sales
13
and
use
tax
pursuant
to
sections
423.14,
423.14A,
and
423.29,
14
or
any
other
provision
of
this
chapter,
fails
to
do
so,
all
15
affiliates
that
directly,
indirectly,
or
constructively
control
16
the
retailer
shall
be
jointly
and
severally
liable
for
any
tax,
17
penalty,
and
interest
under
this
chapter,
regardless
of
whether
18
the
affiliate
is
a
retailer.
19
b.
Pursuant
to
paragraph
“a”
,
the
department
may
elect
20
to
assess
the
full
amount
of
any
tax,
penalty,
and
interest
21
against
the
retailer,
an
affiliate
of
the
retailer
described
22
in
paragraph
“a”
,
or
any
combination
of
the
retailer
and
the
23
retailer’s
affiliates
described
in
paragraph
“a”
.
24
c.
Notwithstanding
any
other
provision
of
law
to
the
25
contrary,
the
department
has
the
discretion
to
deem
an
26
affiliate
of
a
retailer
an
agent
or
alter
ego
of
that
retailer.
27
d.
Notwithstanding
any
other
provision
of
law
to
the
28
contrary,
the
department
has
the
discretion
to
disregard
or
29
look
through
any
organizational
structure
of
an
enterprise
in
30
order
to
assess
and
collect
any
tax,
penalty,
and
interest
31
against
an
affiliate
that
is
acting
to
benefit
an
affiliate
or
32
an
enterprise
of
which
the
affiliate
is
a
part.
33
Sec.
189.
Section
423.34,
Code
2018,
is
amended
to
read
as
34
follows:
35
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423.34
Liability
of
user.
1
Any
person
who
uses
any
tangible
personal
property
,
2
specified
digital
products,
or
services
enumerated
in
section
3
423.2
upon
which
the
use
tax
has
not
been
paid,
either
to
the
4
county
treasurer
or
to
a
retailer
or
direct
to
the
department
5
as
required
by
this
subchapter
,
shall
be
liable
for
the
payment
6
of
tax,
and
shall
on
or
before
the
last
day
of
the
month
next
7
succeeding
each
quarterly
period
pay
the
use
tax
upon
all
8
property
or
services
used
by
the
person
during
the
preceding
9
quarterly
period
in
the
manner
and
accompanied
by
such
returns
10
as
the
director
shall
prescribe.
All
of
the
provisions
of
11
sections
423.32
and
423.33
with
reference
to
the
returns
and
12
payments
shall
be
applicable
to
the
returns
and
payments
13
required
by
this
section
.
14
Sec.
190.
Section
423.36,
subsection
1,
Code
2018,
is
15
amended
to
read
as
follows:
16
1.
A
person
shall
not
engage
in
or
transact
business
as
a
17
retailer
making
taxable
sales
of
tangible
personal
property
,
18
specified
digital
products,
or
furnishing
services
within
19
this
state
or
as
a
retailer
making
taxable
sales
of
tangible
20
personal
property
,
specified
digital
products,
or
furnishing
21
services
for
use
within
this
state,
unless
a
permit
has
been
22
issued
to
the
retailer
under
this
section
,
except
as
provided
23
in
subsection
7
.
Every
person
desiring
to
engage
in
or
24
transact
business
as
a
retailer
shall
file
with
the
department
25
an
application
for
a
permit
to
collect
sales
or
use
tax.
Every
26
application
for
a
sales
or
use
tax
permit
shall
be
made
upon
27
a
form
prescribed
by
the
director
and
shall
set
forth
any
28
information
the
director
may
require.
The
application
shall
29
be
signed
by
an
owner
of
the
business
if
a
natural
person;
in
30
the
case
of
a
retailer
which
is
an
association
or
partnership,
31
by
a
member
or
partner;
and
in
the
case
of
a
retailer
which
32
is
a
corporation,
by
an
executive
officer
or
some
person
33
specifically
authorized
by
the
corporation
to
sign
the
34
application,
to
which
shall
be
attached
the
written
evidence
of
35
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the
person’s
authority.
1
Sec.
191.
Section
423.36,
subsection
2,
paragraph
a,
Code
2
2018,
is
amended
to
read
as
follows:
3
a.
Notwithstanding
subsection
1
,
if
any
person
will
make
4
taxable
sales
of
tangible
personal
property
,
specified
digital
5
products,
or
furnish
services
to
any
state
agency,
that
person
6
shall,
prior
to
the
sale,
apply
for
and
receive
a
permit
to
7
collect
sales
or
use
tax
pursuant
to
this
section
.
A
state
8
agency
shall
not
purchase
tangible
personal
property
,
specified
9
digital
products,
or
services
from
any
person
unless
that
10
person
has
a
valid,
unexpired
permit
issued
pursuant
to
this
11
section
and
is
in
compliance
with
all
other
requirements
in
12
this
chapter
imposed
upon
retailers,
including
but
not
limited
13
to
the
requirement
to
collect
and
remit
sales
and
use
tax
and
14
file
sales
and
use
tax
returns.
15
Sec.
192.
Section
423.36,
subsection
7,
paragraph
b,
Code
16
2018,
is
amended
to
read
as
follows:
17
b.
Persons
engaged
in
selling
tangible
personal
property
,
18
specified
digital
products,
or
furnishing
services
shall
not
be
19
required
to
obtain
or
retain
a
sales
tax
permit
for
a
place
of
20
business
at
which
taxable
sales
of
tangible
personal
property
,
21
specified
digital
products,
or
taxable
performance
of
services
22
will
not
occur.
23
Sec.
193.
Section
423.36,
subsection
9,
paragraph
a,
Code
24
2018,
is
amended
to
read
as
follows:
25
a.
Except
as
provided
in
paragraph
“b”
,
purchasers,
users,
26
and
consumers
of
tangible
personal
property
,
specified
digital
27
products,
or
enumerated
services
taxed
pursuant
to
subchapter
28
II
or
III
of
this
chapter
or
chapter
423B
may
be
authorized,
29
pursuant
to
rules
adopted
by
the
director,
to
remit
tax
owed
30
directly
to
the
department
instead
of
the
tax
being
collected
31
and
paid
by
the
seller.
To
qualify
for
a
direct
pay
tax
permit,
32
the
purchaser,
user,
or
consumer
must
accrue
a
tax
liability
33
of
more
than
four
thousand
dollars
in
tax
under
subchapters
34
II
and
III
in
a
semimonthly
period
and
make
deposits
and
file
35
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returns
pursuant
to
section
423.31
.
This
authority
shall
not
1
be
granted
or
exercised
except
upon
application
to
the
director
2
and
then
only
after
issuance
by
the
director
of
a
direct
pay
3
tax
permit.
4
Sec.
194.
Section
423.40,
subsection
2,
Code
2018,
is
5
amended
to
read
as
follows:
6
2.
a.
Any
person
who
knowingly
sells
tangible
personal
7
property,
specified
digital
products,
tickets
or
admissions
8
to
places
of
amusement
and
athletic
events,
or
gas,
water,
9
electricity,
or
communication
service
at
retail,
or
engages
in
10
the
furnishing
of
services
enumerated
in
section
423.2
,
in
this
11
state
without
procuring
a
permit
to
collect
tax,
as
provided
12
in
section
423.36
,
or
who
violates
section
423.24
and
the
13
officers
of
any
corporation
who
so
act
are
guilty
of
a
serious
14
misdemeanor.
15
b.
A
person
who
knowingly
sells
tangible
personal
property,
16
specified
digital
products,
tickets
or
admissions
to
places
of
17
amusement
and
athletic
events,
or
gas,
water,
electricity,
or
18
communication
service
at
retail,
or
engages
in
the
furnishing
19
of
services
enumerated
in
section
423.2
,
in
this
state
after
20
the
person’s
sales
tax
permit
has
been
revoked
and
before
it
21
has
been
restored
as
provided
in
section
423.36,
subsection
6
,
22
and
the
officers
of
any
corporation
who
so
act
are
guilty
of
an
23
aggravated
misdemeanor.
24
Sec.
195.
Section
423.41,
Code
2018,
is
amended
to
read
as
25
follows:
26
423.41
Books
——
examination.
27
Every
retailer
required
or
authorized
to
collect
taxes
28
imposed
by
this
chapter
and
every
person
using
in
this
state
29
tangible
personal
property,
specified
digital
products,
30
services,
or
the
product
of
services
shall
keep
records,
31
receipts,
invoices,
and
other
pertinent
papers
as
the
director
32
shall
require,
in
the
form
that
the
director
shall
require,
33
for
as
long
as
the
director
has
the
authority
to
examine
and
34
determine
tax
due.
The
director
or
any
duly
authorized
agent
35
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of
the
department
may
examine
the
books,
papers,
records,
1
and
equipment
of
any
person
either
selling
tangible
personal
2
property
,
specified
digital
products,
or
services
or
liable
3
for
the
tax
imposed
by
this
chapter
,
and
investigate
the
4
character
of
the
business
of
any
person
in
order
to
verify
5
the
accuracy
of
any
return
made,
or
if
a
return
was
not
made
6
by
the
person,
ascertain
and
determine
the
amount
due
under
7
this
chapter
.
These
books,
papers,
and
records
shall
be
made
8
available
within
this
state
for
examination
upon
reasonable
9
notice
when
the
director
deems
it
advisable
and
so
orders.
If
10
the
taxpayer
maintains
any
records
in
an
electronic
format,
11
the
taxpayer
shall
comply
with
reasonable
requests
by
the
12
director
or
the
director’s
authorized
agents
to
provide
those
13
electronic
records
in
a
standard
record
format.
The
preceding
14
requirements
shall
likewise
apply
to
users
and
persons
15
furnishing
services
enumerated
in
section
423.2
.
16
Sec.
196.
Section
423.45,
subsection
4,
paragraphs
a,
b,
and
17
e,
Code
2018,
are
amended
to
read
as
follows:
18
a.
The
department
shall
issue
or
the
seller
may
separately
19
provide
exemption
certificates
in
the
form
prescribed
by
the
20
director,
including
certificates
not
made
of
paper,
which
21
conform
to
the
requirements
of
paragraph
“c”
,
to
assist
22
retailers
in
properly
accounting
for
nontaxable
sales
of
23
tangible
personal
property
,
specified
digital
products,
24
or
services
to
purchasers
for
a
nontaxable
purpose.
The
25
department
shall
also
allow
the
use
of
exemption
certificates
26
for
those
circumstances
in
which
a
sale
is
taxable
but
the
27
seller
is
not
obligated
to
collect
tax
from
the
buyer.
28
b.
The
sales
tax
liability
for
all
sales
of
tangible
29
personal
property
and
specified
digital
products
and
all
sales
30
of
services
is
upon
the
seller
and
the
purchaser
unless
the
31
seller
takes
from
the
purchaser
a
valid
exemption
certificate
32
stating
under
penalty
of
perjury
that
the
purchase
is
for
a
33
nontaxable
purpose
and
is
not
a
retail
sale
as
defined
in
34
section
423.1
,
or
the
seller
is
not
obligated
to
collect
tax
35
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due,
or
unless
the
seller
takes
a
fuel
exemption
certificate
1
pursuant
to
subsection
5
.
If
the
tangible
personal
property
,
2
specified
digital
products,
or
services
are
purchased
tax
free
3
pursuant
to
a
valid
exemption
certificate
and
the
tangible
4
personal
property
,
specified
digital
products,
or
services
are
5
used
or
disposed
of
by
the
purchaser
in
a
nonexempt
manner,
the
6
purchaser
is
solely
liable
for
the
taxes
and
shall
remit
the
7
taxes
directly
to
the
department
and
sections
423.31
,
423.32
,
8
423.37
,
423.38
,
423.39
,
423.40
,
423.41
,
and
423.42
shall
apply
9
to
the
purchaser.
10
e.
If
the
circumstances
change
and
as
a
result
the
tangible
11
personal
property
,
specified
digital
products,
or
services
are
12
used
or
disposed
of
by
the
purchaser
in
a
nonexempt
manner
or
13
the
purchaser
becomes
obligated
to
pay
the
tax,
the
purchaser
14
is
liable
solely
for
the
taxes
and
shall
remit
the
taxes
15
directly
to
the
department
in
accordance
with
this
subsection
.
16
Sec.
197.
Section
423.57,
Code
2018,
is
amended
to
read
as
17
follows:
18
423.57
Statutes
applicable.
19
The
director
shall
administer
this
subchapter
as
it
relates
20
to
the
taxes
imposed
in
this
chapter
in
the
same
manner
and
21
subject
to
all
the
provisions
of,
and
all
of
the
powers,
22
duties,
authority,
and
restrictions
contained
in
sections
23
423.14
,
423.14A,
423.15
,
423.16
,
423.17
,
423.19
,
423.20
,
24
423.21
,
423.22
,
423.23
,
423.24
,
423.25
,
423.29
,
423.31
,
423.32
,
25
423.33
,
423.34
,
423.34A
,
423.35
,
423.37
,
423.38
,
423.39
,
26
423.40
,
423.41
,
and
423.42
,
section
423.43,
subsection
1
,
and
27
sections
423.45
,
423.46
,
and
423.47
.
28
Sec.
198.
Section
423.58,
Code
2018,
is
amended
to
read
as
29
follows:
30
423.58
Collection,
permit,
and
tax
return
exemption
for
31
certain
out-of-state
businesses.
32
Notwithstanding
sections
423.14
,
423.14A,
423.29
,
423.31
,
33
423.32
,
and
423.36
,
a
person
meeting
the
requirements
of
34
section
29C.24
is
not
required
to
obtain
a
sales
or
use
tax
35
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permit,
collect
and
remit
sales
and
use
tax,
or
make
and
file
1
applicable
sales
or
use
tax
returns,
as
provided
in
section
2
29C.24,
subsection
3
,
paragraph
“a”
,
subparagraph
(2).
3
Sec.
199.
Section
423B.5,
subsection
1,
Code
2018,
is
4
amended
to
read
as
follows:
5
1.
A
local
sales
and
services
tax
at
the
rate
of
not
more
6
than
one
percent
may
be
imposed
by
a
county
on
the
sales
price
7
taxed
by
the
state
under
chapter
423,
subchapter
II
.
A
local
8
sales
and
services
tax
shall
be
imposed
on
the
same
basis
as
9
the
state
sales
and
services
tax
or
in
the
case
of
the
use
of
10
natural
gas,
natural
gas
service,
electricity,
or
electric
11
service
on
the
same
basis
as
the
state
use
tax
and
shall
not
12
be
imposed
on
the
sale
of
any
property
or
on
any
service
not
13
taxed
by
the
state,
except
the
tax
shall
not
be
imposed
on
14
the
sales
price
from
the
sale
of
motor
fuel
or
special
fuel
15
as
defined
in
chapter
452A
which
is
consumed
for
highway
use
16
or
in
watercraft
or
aircraft
if
the
fuel
tax
is
paid
on
the
17
transaction
and
a
refund
has
not
or
will
not
be
allowed,
18
on
the
sales
price
from
the
sale
of
equipment
by
the
state
19
department
of
transportation,
or
on
the
sales
price
from
the
20
sale
or
use
of
natural
gas,
natural
gas
service,
electricity,
21
or
electric
service
in
a
city
or
county
where
the
sales
price
22
from
the
sale
of
natural
gas
or
electric
energy
is
subject
to
23
a
franchise
fee
or
user
fee
during
the
period
the
franchise
24
or
user
fee
is
imposed.
A
local
sales
and
services
tax
is
25
applicable
to
transactions
within
those
incorporated
and
26
unincorporated
areas
of
the
county
where
it
is
imposed
and
,
27
which
transactions
include
but
are
not
limited
to
sales
sourced
28
pursuant
to
sections
423.15,
423.17,
423.19,
or
423.20,
to
a
29
location
within
that
incorporated
or
unincorporated
area
of
the
30
county.
The
tax
shall
be
collected
by
all
persons
required
31
to
collect
state
sales
taxes.
All
cities
contiguous
to
each
32
other
shall
be
treated
as
part
of
one
incorporated
area
and
the
33
tax
would
be
imposed
in
each
of
those
contiguous
cities
only
34
if
the
majority
of
those
voting
in
the
total
area
covered
by
35
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the
contiguous
cities
favors
its
imposition.
In
the
case
of
a
1
local
sales
and
services
tax
submitted
to
the
registered
voters
2
of
two
or
more
contiguous
counties
as
provided
in
section
3
423B.1,
subsection
4
,
paragraph
“c”
,
all
cities
contiguous
to
4
each
other
shall
be
treated
as
part
of
one
incorporated
area,
5
even
if
the
corporate
boundaries
of
one
or
more
of
the
cities
6
include
areas
of
more
than
one
county,
and
the
tax
shall
be
7
imposed
in
each
of
those
contiguous
cities
only
if
a
majority
8
of
those
voting
on
the
tax
in
the
total
area
covered
by
the
9
contiguous
cities
favored
its
imposition.
10
Sec.
200.
Section
423B.6,
subsection
2,
paragraph
b,
Code
11
2018,
is
amended
to
read
as
follows:
12
b.
The
ordinance
of
a
county
board
of
supervisors
imposing
13
a
local
sales
and
services
tax
shall
adopt
by
reference
the
14
applicable
provisions
of
the
appropriate
sections
of
chapter
15
423
.
All
powers
and
requirements
of
the
director
to
administer
16
the
state
sales
tax
law
and
use
tax
law
are
applicable
to
the
17
administration
of
a
local
sales
and
services
tax
law
and
the
18
local
excise
tax,
including
but
not
limited
to
the
provisions
19
of
section
422.25,
subsection
4
,
sections
422.30
,
422.67
,
20
and
422.68
,
section
422.69,
subsection
1
,
sections
422.70
21
through
422.75
,
section
423.14,
subsection
1
and
subsection
22
2
,
paragraphs
“b”
through
“e”
,
and
sections
423.14A,
423.15
,
23
423.23
,
423.24
,
423.25
,
423.31
through
423.35
,
423.37
through
24
423.42
,
423.46
,
and
423.47
.
Local
officials
shall
confer
25
with
the
director
of
revenue
for
assistance
in
drafting
the
26
ordinance
imposing
a
local
sales
and
services
tax.
A
certified
27
copy
of
the
ordinance
shall
be
filed
with
the
director
as
soon
28
as
possible
after
passage.
29
Sec.
201.
LEGISLATIVE
INTENT.
It
is
the
intent
of
the
30
general
assembly
that
the
provisions
of
this
division
of
this
31
Act
amending
the
definition
of
“place
of
business”
in
section
32
423.1,
subsection
37,
and
“sales”
in
section
423.1,
subsection
33
50,
enacting
definitions
of
“sold
at
retail
in
the
state”
in
34
section
423.1,
subsection
55A,
and
“subscription”
in
section
35
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423.1,
subsection
57A,
and
amending
the
enumerated
service
of
1
pay
television
in
423.2,
subsection
6,
paragraph
“al”,
are
2
conforming
amendments
consistent
with
current
state
law,
and
3
that
the
amendments
do
not
change
the
application
of
current
4
law
but
instead
reflect
current
law
both
before
and
after
the
5
enactment
of
this
division
of
this
Act.
6
Sec.
202.
RELATIONSHIP
TO
EXISTING
LAW
FOR
TAXATION
OF
7
SPECIFIED
DIGITAL
PRODUCTS.
The
provisions
of
this
division
of
8
this
Act
relating
to
the
imposition
of
tax
on
the
sale
or
use
of
9
“specified
digital
products”,
as
defined
in
this
division
of
10
this
Act,
shall
not
be
construed
as
affecting
the
taxability
11
or
nontaxability
under
other
provisions
of
existing
law
of
12
sales
or
uses
occurring
prior
to
the
enactment
of
this
division
13
of
this
Act
of
products
meeting
the
definition
of
“specified
14
digital
products”,
as
defined
in
this
division
of
this
Act.
15
Sec.
203.
EFFECTIVE
DATE.
16
1.
Except
as
provided
in
subsection
2,
this
division
of
this
17
Act
takes
effect
January
1,
2019.
18
2.
The
following
take
effect
July
1,
2018:
19
a.
The
sections
of
this
division
of
this
Act
amending
20
section
423.1,
subsections
37
and
50.
21
b.
The
sections
of
this
division
of
this
Act
enacting
22
section
423.1,
subsections
55A
and
57A.
23
c.
The
section
of
this
division
of
this
Act
amending
section
24
423.2,
subsection
1,
paragraph
“a”,
subparagraph
(1).
25
d.
The
provision
amending
the
enumerated
service
of
pay
26
television
to
include
but
not
be
limited
to
streaming
video,
27
video
on-demand,
and
pay-per-view,
in
the
section
of
this
28
division
of
this
Act
amending
section
423.2,
subsection
6.
29
e.
The
provisions
adding
photography
and
retouching
to
the
30
list
of
enumerated
services
subject
to
the
sales
tax
in
the
31
section
of
this
division
of
this
Act
amending
section
423.2,
32
subsection
6.
33
f.
The
section
of
this
division
of
this
Act
enacting
section
34
423.2,
subsection
8,
paragraph
“d”.
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g.
The
section
of
this
division
of
this
Act
amending
section
1
423.5,
subsection
1,
paragraph
“a”.
2
h.
The
section
of
this
division
of
this
Act
entitled
3
“legislative
intent”
which
describes
the
intent
of
the
general
4
assembly
with
respect
to
certain
amendments
in
this
division
of
5
this
Act
to
the
definition
of
“place
of
business”
in
section
6
423.1,
subsection
37,
“sales”
in
section
423.1,
subsection
50,
7
the
enactment
of
a
definition
for
“subscription”
in
section
8
423.1,
subsection
57A,
and
“sold
at
retail”
in
section
423.1,
9
subsection
55A,
and
amendments
to
the
enumerated
service
of
pay
10
television
in
section
423.2,
subsection
6,
paragraph
“al”.
11
DIVISION
VII
12
HOTEL
AND
MOTEL
EXCISE
TAX
AND
AUTOMOBILE
RENTAL
EXCISE
TAX
13
CHANGES
14
Sec.
204.
Section
423A.2,
subsection
1,
Code
2018,
is
15
amended
to
read
as
follows:
16
1.
For
the
purposes
of
this
chapter
,
unless
the
context
17
otherwise
requires:
18
a.
“Department”
means
the
department
of
revenue.
19
b.
“Lessor”
means
any
of
the
following:
20
(1)
A
person
engaged
in
the
business
of
renting
lodging
to
21
users.
22
(2)
A
person
who
acquires
a
right
to
or
interest
in
any
23
lodging
with
an
intent
to
rent
the
lodging
to
another
person.
24
(3)
A
person
who
actually
or
constructively
rents
lodging,
25
regardless
of
who
owns
or
controls
the
lodging.
26
(4)
A
lodging
facilitator.
27
(5)
A
retailer
or
retailer
maintaining
a
place
of
business
28
in
this
state
as
defined
in
section
423.1,
including
those
29
persons
who
meet
the
requirements
of
section
423.14A,
which
30
retailer
or
retailer
maintaining
a
place
of
business
in
this
31
state
would
be
responsible
for
collection
and
payment
of
the
32
hotel
and
motel
tax
if
it
were
a
sales
or
use
tax
under
chapter
33
423.
34
c.
“Lodging”
means
rooms,
apartments,
or
sleeping
quarters
35
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in
a
hotel,
motel,
inn,
public
lodging
house,
rooming
house,
1
cabin,
apartment,
residential
property,
or
manufactured
or
2
mobile
home
which
is
tangible
personal
property,
or
in
a
3
tourist
court,
or
in
any
place
where
sleeping
accommodations
4
are
furnished
to
transient
guests
for
rent,
whether
with
or
5
without
meals.
Lodging
does
not
include
rooms
that
are
not
6
used
for
sleeping
accommodations.
7
d.
“Lodging
facilitator”
means
any
person
who
facilitates
8
the
renting
of
lodging
to
users
by
satisfying
subparagraphs
(1)
9
and
(2)
as
follows:
10
(1)
The
person
directly
or
indirectly
does
any
of
the
11
following:
12
(a)
Lists,
makes
available,
or
advertises
lodging
for
rent
13
by
a
lessor
in
any
forum.
14
(b)
Transmits
or
otherwise
communicates
an
offer
or
15
acceptance
between
a
lessor
or
user.
16
(c)
Owns,
rents,
licenses,
makes
available,
or
operates
any
17
electronic
or
physical
infrastructure
or
any
property,
process,
18
method,
copyright,
trademark,
or
patent
that
connects
lessors
19
and
users
to
each
other.
20
(d)
Provides
a
platform
or
other
marketplace
for
renting
21
lodging
or
otherwise
facilitates
the
renting
of
lodging,
22
regardless
of
ownership
or
control
of
the
lodging.
23
(e)
Provides
software
development
or
research
and
24
development
activities
related
to
any
activity
described
in
25
this
subparagraph
(1),
if
such
software
development
or
research
26
and
development
activities
are
directly
related
to
the
physical
27
or
electronic
marketplace
provided
by
a
lodging
facilitator.
28
(f)
Provides
or
offers
fulfillment
or
storage
services
for
a
29
lessor.
30
(g)
Sets
prices
for
a
lessor’s
rental
of
lodging.
31
(h)
Provides
or
offers
customer
service
to
a
lessor
or
32
a
lessor’s
customers,
or
accepts
or
assists
with
returns,
33
exchanges,
cancellations,
or
rescheduling
of
the
rental
of
34
lodging
by
a
lessor.
35
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_____
(2)
The
person
directly
or
indirectly
does
any
of
the
1
following:
2
(a)
Collects
the
sales
price
for
the
renting
of
the
lodging.
3
(b)
Provides
payment
processing
services
for
the
renting
of
4
lodging.
5
(c)
Charges,
collects,
or
otherwise
receives
booking
fees,
6
advertising
revenues,
or
other
consideration
from
the
renting
7
of
lodging
or
the
facilitation
of
the
renting
of
lodging,
8
regardless
of
ownership
or
control
of
the
lodging.
9
(d)
Through
terms
and
conditions,
agreements,
or
10
arrangements
with
a
third
party,
collects
payment
in
connection
11
with
a
rental
of
lodging
from
a
user
and
transmits
that
payment
12
to
the
lessor,
regardless
of
whether
the
person
collecting
13
and
transmitting
such
payment
receives
compensation
or
other
14
consideration
in
exchange
for
the
service.
15
(e)
Provides
a
virtual
currency
that
users
are
allowed
or
16
required
to
use
to
rent
lodging.
17
d.
e.
“Person”
means
the
same
as
the
term
is
defined
in
18
section
423.1
.
19
e.
f.
“Renting”
,
“rental”
,
or
“rent”
means
a
transfer
of
20
possession
or
control
of
lodging
for
a
fixed
or
indeterminate
21
term
for
consideration
and
includes
any
kind
of
direct
or
22
indirect
charge
for
such
lodging
or
its
use.
23
f.
g.
“Sales
price”
means
the
consideration
for
renting
of
24
lodging
and
means
the
same
as
the
term
is
defined
in
section
25
423.1
all
direct
or
indirect
consideration,
including
but
26
not
limited
to
cash,
credit,
property,
and
services,
paid
in
27
connection
with
any
charge
of
any
description
associated
with
28
the
renting
of
lodging
or
with
communicating,
negotiating,
29
reserving,
booking,
facilitating,
or
otherwise
arranging
to
30
rent
lodging,
including
but
not
limited
to
booking
fees,
31
reservation
fees,
service
fees,
cleaning
fees,
linen
fees,
32
towel
fees,
and
nonrefundable
deposits
.
When
determining
“sales
33
price”
,
no
deduction
shall
be
taken
for
any
of
the
following:
34
(1)
The
lessor’s
cost
of
the
property
rented.
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(2)
The
cost
of
materials
used,
labor
or
service
cost,
1
interest,
losses,
all
costs
of
transportation
to
the
lessor,
2
all
taxes
imposed
on
the
lessor,
or
any
other
expenses
of
the
3
lessor.
4
(3)
Charges
by
the
lessor
for
any
services
necessary
to
5
complete
the
rental
transaction.
6
g.
h.
“User”
means
a
person
to
whom
lodging
is
rented.
7
Sec.
205.
NEW
SECTION
.
423A.3A
Collection
and
remittance
by
8
lodging
facilitators
——
joint
and
several
liability.
9
If
a
transaction
for
the
rental
of
lodging
involves
both
a
10
lodging
facilitator
and
another
lessor,
all
of
the
following
11
shall
apply:
12
1.
The
lodging
facilitator
shall
collect
the
state-imposed
13
tax
under
section
423A.3
and
the
locally
imposed
tax
under
14
section
423A.4
on
the
entire
sales
price
paid
by
the
user,
15
regardless
of
the
amount
of
the
sales
price
that
will
16
ultimately
accrue
to
or
benefit
the
lodging
facilitator,
17
another
lessor,
or
any
other
person.
18
2.
The
lodging
facilitator
and
any
other
lessor
involved
19
in
the
transaction
shall
be
jointly
and
severally
liable
for
20
collecting
and
remitting
the
tax
under
sections
423A.3
and
21
423A.4.
22
Sec.
206.
Section
423A.5,
Code
2018,
is
amended
to
read
as
23
follows:
24
423A.5
Exemptions.
25
1.
There
are
exempted
from
the
provisions
of
this
chapter
26
and
from
the
computation
of
any
amount
of
tax
imposed
by
27
section
423A.3
this
chapter
all
of
the
following:
28
a.
1.
The
sales
price
from
the
renting
of
lodging
which
is
29
rented
by
the
same
person
for
a
period
of
more
than
thirty-one
30
consecutive
days.
31
b.
2.
The
sales
price
from
the
renting
of
sleeping
rooms
32
in
dormitories
and
in
memorial
unions
at
all
universities
and
33
colleges
located
in
the
state
of
Iowa.
34
2.
There
is
exempted
from
the
provisions
of
this
chapter
and
35
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from
the
computation
of
any
amount
of
tax
imposed
by
section
1
423A.4
all
of
the
following:
2
a.
The
sales
price
from
the
renting
of
lodging
or
rooms
3
exempt
under
subsection
1
.
4
b.
3.
The
sales
price
of
lodging
furnished
to
the
guests
of
5
a
religious
institution
if
the
property
is
exempt
under
section
6
427.1,
subsection
8
,
and
the
purpose
of
renting
is
to
provide
a
7
place
for
a
religious
retreat
or
function
and
not
a
place
for
8
transient
guests
generally.
9
Sec.
207.
Section
423A.6,
subsection
4,
Code
2018,
is
10
amended
to
read
as
follows:
11
4.
Section
422.25,
subsection
4
,
sections
422.30
,
422.67
,
12
and
422.68
,
section
422.69,
subsection
1
,
sections
422.70
,
13
422.71
,
422.72
,
422.74
,
and
422.75
,
section
423.14,
subsection
14
1
,
and
sections
423.23
,
423.24
,
423.25
,
423.31
,
423.33
,
15
423.35
,
423.37
through
423.42
,
and
423.47
,
consistent
with
the
16
provisions
of
this
chapter
,
apply
with
respect
to
the
taxes
17
authorized
under
this
chapter
,
in
the
same
manner
and
with
the
18
same
effect
as
if
the
state
and
local
hotel
and
motel
taxes
19
were
retail
sales
taxes
within
the
meaning
of
those
statutes.
20
Notwithstanding
this
subsection
,
the
director
shall
provide
for
21
quarterly
filing
of
returns
and
for
other
than
quarterly
filing
22
of
returns
both
as
prescribed
in
section
423.31
.
The
director
23
may
require
all
persons
who
are
engaged
in
the
business
of
24
deriving
any
sales
price
subject
to
tax
under
this
chapter
to
25
register
with
the
department.
All
taxes
collected
under
this
26
chapter
by
a
retailer
,
lessor,
or
any
individual
other
person
27
are
deemed
to
be
held
in
trust
for
the
state
of
Iowa
and
the
28
local
jurisdictions
imposing
the
taxes.
29
Sec.
208.
Section
423C.2,
subsection
3,
Code
2018,
is
30
amended
to
read
as
follows:
31
3.
“Lessor”
means
a
any
of
the
following:
32
a.
A
person
engaged
in
the
business
of
renting
automobiles
33
to
users.
“Lessor”
includes
a
34
b.
A
motor
vehicle
dealer
licensed
pursuant
to
chapter
35
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322
who
rents
automobiles
to
users.
For
this
purpose,
the
1
objective
of
making
a
profit
is
not
necessary
to
make
the
2
renting
activity
a
business.
3
c.
A
person
who
acquires
a
right
to
or
interest
in
any
4
automobile
with
an
intent
to
rent
the
automobile
to
another
5
person.
6
d.
A
person
who
actually
or
constructively
rents
7
automobiles,
regardless
of
who
owns
or
controls
the
8
automobiles.
9
e.
A
rental
facilitator.
10
f.
A
retailer
or
retailer
maintaining
a
place
of
business
in
11
this
state
as
defined
in
section
423.1,
including
those
persons
12
who
meet
the
requirements
of
section
423.14A,
which
retailer
or
13
retailer
maintaining
a
place
of
business
in
this
state
would
be
14
responsible
for
collection
and
payment
of
the
automobile
rental
15
excise
tax
if
it
were
a
sales
or
use
tax
under
chapter
423.
16
Sec.
209.
Section
423C.2,
Code
2018,
is
amended
by
adding
17
the
following
new
subsection:
18
NEW
SUBSECTION
.
06.
“Rental
facilitator”
means
any
person
19
who
facilitates
the
renting
of
an
automobile
to
users
by
20
satisfying
paragraphs
“a”
and
“b”
as
follows:
21
a.
The
person
directly
or
indirectly
does
any
of
the
22
following:
23
(1)
Lists,
makes
available,
or
advertises
automobiles
for
24
rent
by
a
lessor
in
any
forum.
25
(2)
Transmits
or
otherwise
communicates
an
offer
or
26
acceptance
between
a
lessor
or
user.
27
(3)
Owns,
rents,
licenses,
makes
available,
or
operates
any
28
electronic
or
physical
infrastructure
or
any
property,
process,
29
method,
copyright,
trademark,
or
patent
that
connects
lessors
30
and
users
to
each
other.
31
(4)
Provides
a
platform
or
other
marketplace
for
32
renting
automobiles
or
otherwise
facilitates
the
renting
33
of
automobiles,
regardless
of
ownership
or
control
of
the
34
automobile.
35
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(5)
Provides
software
development
or
research
and
1
development
activities
related
to
any
activity
described
in
2
this
paragraph
“a”
,
if
such
software
development
or
research
and
3
development
activities
are
directly
related
to
the
physical
or
4
electronic
marketplace
provided
by
a
rental
facilitator.
5
(6)
Provides
or
offers
fulfillment
or
storage
services
for
a
6
lessor.
7
(7)
Sets
prices
for
a
lessor’s
rental
of
automobiles.
8
(8)
Provides
or
offers
customer
service
to
a
lessor
or
9
a
lessor’s
customers,
or
accepts
or
assists
with
returns,
10
exchanges,
cancellations,
or
rescheduling
of
the
rental
of
11
automobiles
by
a
lessor.
12
b.
The
person
directly
or
indirectly
does
any
of
the
13
following:
14
(1)
Collects
the
rental
price
for
the
renting
of
an
15
automobile.
16
(2)
Provides
payment
processing
services
for
the
renting
of
17
an
automobile.
18
(3)
Charges,
collects,
or
otherwise
receives
booking
19
fees,
advertising
revenues,
or
other
consideration
from
the
20
renting
of
an
automobile
or
the
facilitation
of
the
renting
21
of
an
automobile,
regardless
of
ownership
or
control
of
the
22
automobile.
23
(4)
Through
terms
and
conditions,
agreements,
or
24
arrangements
with
a
third
party,
collects
payment
in
connection
25
with
a
rental
of
automobiles
from
a
user
and
transmits
that
26
payment
to
the
lessor,
regardless
of
whether
the
person
27
collecting
and
transmitting
such
payment
receives
compensation
28
or
other
consideration
in
exchange
for
the
service.
29
(5)
Provides
a
virtual
currency
that
users
are
allowed
or
30
required
to
use
to
rent
automobiles.
31
Sec.
210.
Section
423C.2,
subsection
6,
Code
2018,
is
32
amended
by
striking
the
subsection
and
inserting
in
lieu
33
thereof
the
following:
34
6.
“Rental
price”
means
all
direct
or
indirect
35
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consideration,
including
but
not
limited
to
cash,
credit,
1
property,
and
services,
paid
in
connection
with
any
charge
of
2
any
description
associated
with
the
renting
of
an
automobile
3
or
with
communicating,
negotiating,
reserving,
booking,
4
facilitating,
or
otherwise
arranging
to
rent
an
automobile,
5
including
but
not
limited
to
booking
fees,
reservation
fees,
6
service
fees,
and
nonrefundable
deposits.
When
determining
7
“rental
price”
,
no
deduction
shall
be
taken
for
any
of
the
8
following:
9
a.
The
lessor’s
cost
of
the
property
rented.
10
b.
The
cost
of
materials
used,
labor
or
service
cost,
11
interest,
losses,
all
costs
of
transportation
to
the
lessor,
12
all
taxes
imposed
on
the
lessor,
or
any
other
expenses
of
the
13
lessor.
14
c.
Charges
by
the
lessor
for
any
services
necessary
to
15
complete
the
rental
transaction.
16
Sec.
211.
NEW
SECTION
.
423C.3A
Collection
and
remittance
by
17
rental
facilitators
——
joint
and
several
liability.
18
If
a
transaction
for
the
rental
of
an
automobile
involves
19
both
a
rental
facilitator
and
another
lessor,
all
of
the
20
following
shall
apply:
21
1.
The
rental
facilitator
shall
collect
the
tax
under
22
section
423C.3
on
the
entire
rental
price
paid
by
the
user,
23
regardless
of
the
amount
of
the
rental
price
that
will
24
ultimately
accrue
to
or
benefit
the
rental
facilitator,
another
25
lessor,
or
any
other
person.
26
2.
The
rental
facilitator
and
any
other
lessor
involved
27
in
the
transaction
shall
be
jointly
and
severally
liable
for
28
collecting
and
remitting
the
tax
under
section
423C.3.
29
Sec.
212.
LEGISLATIVE
INTENT.
It
is
the
intent
of
the
30
general
assembly
that
the
provision
of
this
division
of
this
31
Act
amending
the
definition
of
“lodging”
in
section
423A.2,
32
subsection
1,
paragraph
“c”,
is
a
conforming
amendment
33
consistent
with
current
state
law,
and
that
the
amendment
34
does
not
change
the
application
of
current
law
but
instead
35
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reflects
current
law
both
before
and
after
the
enactment
of
1
this
division
of
this
Act.
2
Sec.
213.
EFFECTIVE
DATE.
3
1.
Except
as
provided
in
subsection
2,
this
division
of
this
4
Act
takes
effect
January
1,
2019.
5
2.
The
following
take
effect
July
1,
2018:
6
a.
The
provision
amending
the
definition
of
“lodging”
in
the
7
section
of
this
division
of
this
Act
amending
section
423A.2,
8
subsection
1,
paragraph
“c”.
9
b.
The
section
of
this
division
of
this
Act
entitled
10
“legislative
intent”
which
describes
the
intent
of
the
general
11
assembly
with
respect
to
the
amendment
in
this
division
of
12
this
Act
to
the
definition
of
“lodging”
in
section
423A.2,
13
subsection
1,
paragraph
“c”.
14
EXPLANATION
15
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
16
the
explanation’s
substance
by
the
members
of
the
general
assembly.
17
This
bill
makes
numerous
changes
to
the
individual
and
18
corporate
income
taxes,
the
franchise
tax,
tax
credits,
19
the
moneys
and
credits
tax,
the
sales
and
use
taxes
and
20
local
option
sales
tax,
the
hotel
and
motel
excise
tax,
the
21
automobile
rental
excise
tax,
and
the
Iowa
529
plan
and
Iowa
22
ABLE
plan.
23
DIVISION
I
——
INCOME
TAX
CHANGES
FOR
TAX
YEAR
2018.
The
24
federal
Protecting
Americans
From
Tax
Hikes
Act
(PATH
Act)
25
enacted
by
Congress
in
2015
made
permanent
certain
increased
26
phase-out
amounts
and
increased
credit
percentages
of
the
27
federal
earned
income
tax
credit
(EITC)
that
were
scheduled
28
to
expire
in
2018,
and
made
permanent
the
deduction
for
29
certain
expenses
incurred
by
elementary
and
secondary
school
30
teachers
that
was
scheduled
to
expire
in
2015.
To
date,
Iowa
31
has
not
coupled
with
these
federal
changes
for
purposes
of
32
calculating
the
Iowa
EITC
or
for
the
teacher
expense
deduction.
33
Division
I
couples
with
these
federal
EITC
and
teacher
expense
34
deduction
changes
for
purposes
of
the
Iowa
EITC
and
Iowa
net
35
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_____
income
calculation
for
tax
year
2018.
Division
I
also
couples
1
for
tax
year
2018
with
certain
accounting
method
and
other
2
miscellaneous
changes
made
in
the
federal
Tax
Cuts
and
Jobs
Act
3
of
2017
for
purposes
of
the
individual
and
corporate
income
4
taxes,
and
the
franchise
tax,
to
the
extent
those
amendments
5
affect
the
calculation
of
federal
adjusted
gross
income
or
6
federal
taxable
income
for
federal
tax
purposes
for
tax
year
7
2018.
These
include
amendments
contained
in
the
following
8
sections
of
the
federal
Tax
Cuts
and
Jobs
Act:
§13102
(small
9
business
accounting
method
changes),
§13221
(accounting
method
10
rules
for
the
taxable
year
of
inclusion),
§13504
(repeal
of
11
technical
termination
of
partnerships),
§13541
(electing
small
12
business
trust),
§13543
(treatment
of
S
corporation
conversion
13
to
C
corporation),
§13611
(repeal
of
special
rule
permitting
14
recharacterization
of
Roth
IRA
conversions),
and
§13613
15
(extended
rollover
period
for
qualified
plan
loans).
16
The
division
takes
effect
upon
enactment
and
applies
17
retroactively
to
January
1,
2018,
for
tax
years
beginning
on
or
18
after
that
date,
but
prior
to
January
1,
2019.
19
DIVISION
II
——
INCOME
AND
FRANCHISE
TAX
CHANGES
BEGINNING
IN
20
2019.
Division
II
makes
numerous
changes
to
the
individual
and
21
corporate
income
tax
and
franchise
tax.
22
INDIVIDUAL
INCOME
TAX.
Under
current
law,
the
starting
23
point
for
computing
the
Iowa
individual
income
tax
is
federal
24
adjusted
gross
income
before
the
net
operating
loss
deduction,
25
which
is
generally
a
taxpayer’s
gross
income
minus
several
26
deductions.
From
that
point,
Iowa
requires
several
adjustments
27
and
then
provides
taxpayers
with
a
deduction
for
federal
income
28
taxes
paid,
and
the
option
to
deduct
a
standard
deduction
or
29
itemized
deductions.
The
bill
changes
the
starting
point
for
30
computing
the
individual
income
tax
to
federal
taxable
income,
31
which
includes
all
deductions
and
adjustments
taken
at
the
32
federal
level
in
computing
tax,
including
a
standard
deduction
33
or
itemized
deductions,
and
the
new
qualified
business
income
34
deduction
allowed
for
certain
income
earned
from
a
pass-through
35
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_____
entity.
Because
the
starting
point
will
now
be
federal
taxable
1
income,
and
federal
law
does
not
provide
for
the
filing
status
2
of
married
filing
separately
on
a
combined
return,
the
bill
3
repeals
that
filing
status
option
for
Iowa
tax
purposes.
4
Because
net
operating
loss
will
no
longer
be
calculated
5
at
the
state
level,
the
bill
requires
taxpayers
to
add
back
6
any
federal
net
operating
loss
deduction
carried
over
from
a
7
taxable
year
beginning
prior
to
January
1,
2019,
but
allows
8
taxpayers
to
deduct
any
remaining
Iowa
net
operating
loss
from
9
a
prior
taxable
year.
10
The
bill
repeals
the
alternative
minimum
tax,
and
also
11
repeals
most
deductions
and
exclusions
previously
available
12
when
computing
net
income
and
taxable
income
under
Iowa
law,
13
including
the
Iowa
optional
standard
deduction
and
all
itemized
14
deductions,
and
the
ability
to
deduct
federal
income
taxes,
15
except
for
a
one-year
phase-out
in
2019
for
taxes
paid,
or
16
refunds
received,
that
relate
to
a
prior
year.
17
The
bill
keeps
the
deduction
for
military
pension
income
18
or
military
active
duty
pay.
The
bill
also
keeps
the
general
19
pension
exclusion
available
under
current
law,
and
increases
20
it
from
$6,000
($12,000
for
married
filing
jointly)
to
$10,000
21
($20,000
for
married
filing
jointly).
22
The
bill
maintains
the
deductions
for
contributions
to
the
23
Iowa
529
plan,
the
Iowa
ABLE
plan,
the
first-time
homebuyer
24
savings
account,
the
deduction
for
social
security
retirement
25
benefits,
the
deduction
for
certain
payments
received
for
26
providing
unskilled
in-home
health
care,
for
contributions
27
to
an
individual
development
account,
for
certain
amounts
28
received
from
the
veterans
trust
fund,
for
victim
compensation
29
awards,
and
for
biodiesel
production
refunds.
The
bill
30
keeps
the
deductions
for
certain
wages
paid
to
individuals
31
with
disabilities
or
individuals
previously
convicted
of
a
32
felony,
and
for
certain
organ
donations,
but
only
for
tax
years
33
beginning
before
January
1,
2022.
34
The
bill
provides
a
new
deduction
for
any
income
of
an
35
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S.F.
_____
employee
resulting
from
the
payment
by
an
employer,
whether
1
paid
to
the
employee
or
to
a
lender,
of
principal
or
interest
2
on
the
employee’s
qualified
education
loan.
3
Federal
income
tax
law
does
provide
a
limited
deduction
for
4
a
taxpayer’s
payment
of
interest
on
qualified
education
loans,
5
and
the
bill
disallows
the
deduction
provided
in
the
bill
for
6
any
amount
of
income
that
represents
an
interest
payment
that
7
was
also
deducted
by
the
employee
in
computing
federal
taxable
8
income.
9
The
term
“qualified
education
loan”
is
defined
to
mean
the
10
same
as
it
does
under
the
Internal
Revenue
Code
(IRC),
and
11
generally
includes
debt
incurred
on
behalf
of
a
taxpayer,
or
a
12
taxpayer’s
spouse
or
dependent,
to
pay
expenses
of
attending
13
institutions
of
higher
education
participating
in
the
federal
14
student
financial
aid
programs.
15
Under
current
law,
the
Iowa
individual
income
tax
conforms
16
to
the
IRC
as
of
a
certain
date,
and
the
general
assembly
17
chooses
to
couple
or
decouple
with
changes
to
the
IRC
through
18
legislation.
The
bill
changes
this
conformity
by
permanently
19
coupling
with
the
IRC.
This
permanent
coupling
has
the
effect
20
of
incorporating
into
Iowa
tax
law
all
the
changes
made
to
21
the
IRC
since
2015,
including
changes
made
in
the
federal
22
Protecting
Americans
from
Tax
Hikes
Act
of
2015,
and
the
23
federal
Tax
Cuts
and
Jobs
Act
of
2017.
This
permanent
coupling
24
also
has
the
effect
of
automatically
incorporating
into
Iowa
25
tax
law
any
future
changes
that
may
be
made
to
the
IRC,
unless
26
the
general
assembly
were
to
affirmatively
decouple
from
a
27
particular
provision
through
legislation.
28
However,
the
bill
does
decouple
from
the
federal
additional
29
first-year
depreciation
allowance
in
section
168(k)
of
the
30
IRC.
By
decoupling,
taxpayers
who
claim
bonus
depreciation
for
31
federal
tax
purposes
are
required
to
add
such
depreciation
32
amounts
back
to
Iowa
net
income,
but
are
then
allowed
under
33
existing
state
law
to
deduct
the
amount
of
depreciation
that
34
would
otherwise
be
allowable
under
federal
law,
without
regard
35
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_____
to
the
bonus
depreciation
allowance.
1
Current
law
provides
nine
regular
tax
brackets
containing
2
progressively
higher
amounts
of
taxable
income
that
are
taxed
3
at
progressively
higher
tax
rates,
from
a
low
of
0.36
percent,
4
to
a
high
of
8.98
percent.
The
taxable
income
amounts
in
each
5
tax
bracket
are
indexed
to
inflation
and
increased
each
year.
6
The
bill
reduces
the
number
of
brackets
to
five
and
modifies
7
the
tax
rates
as
follows:
8
Income
over:
But
not
over:
Tax
rate:
9
1)
$0
$6,000
5.00%
10
2)
$6,000
$15,000
5.25%
11
3)
$15,000
$30,000
5.50%
12
4)
$30,000
$75,000
6.00%
13
5)
$75,000
or
more
6.60%
14
The
bill
further
reduces
the
top
tax
rate
from
6.60%
to
6.50%
15
in
tax
year
2020,
to
6.40%
in
tax
year
2021,
and
to
6.30%
for
16
tax
year
2022
and
beyond.
For
a
married
couple
filing
a
joint
17
return,
the
bill
provides
that
all
of
the
income
amounts
in
18
each
bracket
above
are
doubled.
Finally,
the
bill
provides
19
that
beginning
in
2023,
all
of
the
tax
rates
will
be
indexed
to
20
inflation
and
reduced
each
year.
21
CORPORATE
INCOME
TAX
AND
FRANCHISE
TAX.
The
starting
point
22
for
calculating
the
corporate
income
tax
and
the
franchise
23
tax
is
federal
taxable
income
before
the
net
operating
loss
24
deduction,
because
net
operating
loss
is
calculated
at
the
25
state
level.
The
bill
repeals
the
separate
calculation
of
26
net
operating
loss
at
the
state
level.
As
a
result,
the
bill
27
requires
taxpayers
to
add
back
any
federal
net
operating
loss
28
deduction
carried
over
from
a
taxable
year
beginning
prior
to
29
January
1,
2019,
but
allows
taxpayers
to
deduct
any
remaining
30
Iowa
net
operating
loss
from
a
prior
taxable
year.
31
The
bill
repeals
the
alternative
minimum
tax
for
the
32
corporate
income
tax,
and
also
repeals
most
deductions
and
33
exclusions
previously
available
when
computing
net
income
and
34
taxable
income
under
Iowa
law,
including
the
ability
to
deduct
35
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87
mm/jh
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130
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_____
federal
income
taxes,
except
for
a
one-year
phase-out
in
2019
1
for
taxes
paid,
or
refunds
received,
that
relate
to
a
prior
2
year.
The
bill
keeps
the
deduction
for
certain
wages
paid
3
to
individuals
with
disabilities
or
individuals
previously
4
convicted
of
a
felony,
but
only
for
tax
years
beginning
before
5
January
1,
2022.
6
Under
current
law,
the
Iowa
corporate
income
tax
and
7
franchise
tax
conforms
to
the
IRC
as
of
a
certain
date,
and
the
8
general
assembly
chooses
to
couple
or
decouple
with
changes
to
9
the
IRC
through
legislation.
The
bill
changes
this
conformity
10
by
permanently
coupling
with
the
IRC.
This
permanent
coupling
11
has
the
effect
of
incorporating
into
Iowa
tax
law
all
the
12
changes
made
to
the
IRC
since
2015,
including
changes
made
in
13
the
federal
Protecting
Americans
from
Tax
Hikes
Act
of
2015,
14
and
the
federal
Tax
Cuts
and
Jobs
Act
of
2017.
This
permanent
15
coupling
also
has
the
effect
of
automatically
incorporating
16
into
Iowa
tax
law
any
future
changes
that
may
be
made
to
the
17
IRC,
unless
the
general
assembly
were
to
affirmatively
decouple
18
from
a
particular
provision
through
legislation.
19
However,
the
bill
does
decouple
from
the
federal
additional
20
first-year
depreciation
allowance
in
section
168(k)
of
the
21
IRC.
By
decoupling,
taxpayers
who
claim
bonus
depreciation
22
for
federal
tax
purposes
are
required
to
add
such
depreciation
23
amounts
back
to
Iowa
net
income,
but
are
then
allowed
under
24
existing
state
law
to
deduct
the
amount
of
depreciation
that
25
would
otherwise
be
allowable
under
federal
law,
without
regard
26
to
the
bonus
depreciation
allowance.
27
Current
law
provides
four
progressively
higher
tax
brackets
28
and
tax
rates
for
the
corporate
income
tax,
ranging
from
a
low
29
of
8
percent,
to
a
high
of
12
percent.
The
bill
reduces
the
30
corporate
tax
rates
as
follows:
31
Income
over:
But
not
over:
2019
2020
2021
2022
and
later
32
1)
$0
$25,000
6%
6%
5.5%
5.5%
33
2)
$25,000
$100,000
8%
8%
5.5%
5.5%
34
3)
$100,000
$250,000
10%
8%
5.5%
5.5%
35
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_____
4)
$250,000
and
more
10%
10%
8%
7%
1
Division
II
takes
effect
January
1,
2019,
and
applies
to
tax
2
years
beginning
on
or
after
that
date.
3
DIVISION
III
——
TAX
CREDITS.
Division
III
makes
numerous
4
changes
to
tax
credits
and
tax
credit
programs.
5
The
bill
repeals
the
taxpayers
trust
fund
tax
credit
6
effective
January
1,
2020.
7
The
bill
increases
the
annual
tax
credit
allocation
limit
8
of
the
angel
investor
tax
credit
program
from
$2
million
to
9
$4
million,
and
provides
that
in
any
fiscal
year
in
which
the
10
angel
investor
program
allocation
exceeds
$2
million,
the
$8
11
million
annual
tax
credit
allocation
limit
of
the
innovation
12
fund
investment
tax
credit
program
shall
be
reduced
by
the
13
amount
that
the
angel
investor
tax
credit
allocation
exceeds
$2
14
million
for
that
same
fiscal
year.
This
change
takes
effect
15
July
1,
2018.
16
The
bill
increases
the
annual
tax
credit
allocation
limit
of
17
the
workforce
housing
tax
incentive
program
to
$22
million
from
18
$20
million,
and
provides
that
the
entire
$2
million
increase
19
shall
be
reserved
for
housing
projects
in
small
cities,
thereby
20
increasing
the
small
city
reserve
under
the
program
from
$5
21
million
to
$7
million
per
fiscal
year.
These
changes
take
22
effect
July
1,
2018.
23
The
bill
makes
several
changes
to
the
high
quality
jobs
24
program.
The
bill
reduces
to
$80
million
the
annual
tax
25
credit
allocation
limit
of
the
high
quality
jobs
program,
for
26
fiscal
years
beginning
on
or
after
July
1,
2018.
The
bill
27
also
prohibits
data
center
businesses
and
web
search
portal
28
businesses,
as
defined
in
the
bill,
from
participating
in
29
the
high
quality
jobs
program,
unless
the
businesses
had
a
30
physical
presence
in
this
state
prior
to
July
1,
2018.
The
31
bill
repeals
the
ability
under
the
high
quality
jobs
program
of
32
eligible
businesses
to
receive
tax
credits
and
tax
refunds
for
33
taxes
attributable
to
racks,
shelving,
and
conveyor
equipment
34
to
be
used
in
a
warehouse
or
distribution
center,
beginning
35
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_____
January
1,
2019.
The
bill
repeals
the
refundability
of
the
1
supplemental
research
activities
tax
credit
available
under
the
2
high
quality
jobs
program
beginning
January
1,
2019.
Finally,
3
the
bill
repeals
the
high
quality
jobs
program
effective
July
4
1,
2025.
5
The
bill
increases,
from
5
percent
and
15
percent,
to
6
7
percent
and
17
percent,
the
two
tax
credit
rates
of
the
7
agricultural
asset
transfer
tax
credit,
beginning
January
1,
8
2019.
The
bill
also
increases
from
$6
million
to
$8
million
9
the
number
of
tax
credits
that
may
be
issued
per
fiscal
year
10
under
the
agricultural
asset
transfer
tax
credit
program,
11
beginning
July
1,
2018.
12
The
bill
repeals
the
accelerated
career
education
program
13
provided
under
Code
chapter
260G
on
July
1,
2025.
14
The
bill
extends
by
one
year
the
deadline
for
entering
into
15
withholding
agreements
under
the
targeted
jobs
withholding
16
credit
pilot
project
from
June
30,
2018,
to
June
30,
2019.
17
The
bill
reduces
to
$35
million
from
$45
million
the
number
18
of
historic
preservation
tax
credits
that
may
be
awarded
each
19
fiscal
year,
beginning
July
1,
2018,
and
repeals
the
historic
20
preservation
tax
credit
program
on
July
1,
2025.
21
The
bill
modifies
the
research
activities
tax
credits
under
22
the
individual
and
corporate
income
tax
by
providing
that
the
23
credits
will
only
be
available
to
businesses
engaged
in
the
24
manufacturing,
life
sciences,
software
engineering,
or
aviation
25
and
aerospace
industry,
and
to
the
extent
the
business
claims
26
and
is
allowed
a
research
credit
for
such
qualified
research
27
expenses
under
the
IRC
for
the
same
taxable
year
it
is
claiming
28
the
state
research
activities
credit.
The
bill
includes
29
examples
of
persons
ineligible
for
the
tax
credits.
These
30
changes
take
effect
upon
enactment
and
apply
retroactively
to
31
January
1,
2018,
for
tax
years
beginning
on
or
after
that
date
32
and
for
tax
returns,
including
amended
returns,
filed
on
or
33
after
that
date
for
any
tax
year.
34
The
bill
further
modifies
the
research
activities
tax
35
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credits
under
the
individual
and
corporate
income
tax
by
1
amending
the
definition
of
“base
amount”
for
purposes
of
2
calculating
the
credits.
This
change
takes
effect
upon
3
enactment
and
applies
retroactively
to
January
1,
2010,
for
tax
4
years
beginning
on
or
after
that
date.
5
Because
Division
II
repeals
the
individual
and
corporate
6
alternative
minimum
taxes,
the
bill
allows
a
taxpayer
to
7
claim
any
remaining
alternative
minimum
tax
credit
against
8
the
individual’s
or
corporation’s
regular
tax
liability
for
9
the
2019
tax
year,
and
the
bill
then
repeals
the
alternative
10
minimum
tax
credit
beginning
in
tax
year
2020.
11
The
bill
increases
the
total
amount
of
school
tuition
12
organization
tax
credits
that
may
be
issued
per
tax
year
to
$13
13
million
from
$12
million
for
tax
years
beginning
on
or
after
14
January
1,
2019.
The
bill
also
increases
the
household
income
15
limit
at
which
a
student
is
considered
an
“eligible
student”
16
under
the
school
tuition
organization
tax
credit
program
to
17
four
times
the
federal
poverty
amount
for
tuition
grants
18
provided
on
or
after
January
1,
2019.
19
The
bill
repeals
the
tuition
and
textbook
tax
credit,
the
20
volunteer
fire
fighter
and
volunteer
emergency
medical
services
21
personnel
member
tax
credit,
and
the
reserve
peace
officer
tax
22
credit,
effective
January
1,
2022.
23
The
bill
repeals
the
geothermal
tax
credit,
the
geothermal
24
heat
pump
tax
credit,
the
farm
to
food
donation
tax
credit,
and
25
the
ethanol
promotion
tax
credit
on
January
1,
2019.
26
The
bill
repeals
the
solar
energy
system
tax
credits
on
July
27
1,
2018,
for
solar
energy
system
installations
occurring
on
or
28
after
that
date.
29
The
bill
requires
the
legislative
tax
expenditure
committee
30
created
in
Code
section
2.45
to
study
all
tax
credits
available
31
under
Iowa
law
during
the
2018
interim,
and
to
submit
its
32
findings
and
recommendations
to
the
general
assembly
for
33
consideration
during
the
2019
legislative
session.
As
part
34
of
the
study,
the
legislative
tax
expenditure
committee
is
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required
to
consider
new
or
different
tax
credit
or
other
1
incentive
programs
for
economic
development.
2
DIVISION
IV
——
FRANCHISE
TAX
AND
MONEYS
AND
CREDITS
TAX.
3
Division
IV
relates
to
the
state
franchise
tax
and
the
state
4
moneys
and
credits
tax.
The
bill
repeals
the
state
moneys
and
5
credits
tax
in
Code
section
533.329
imposed
on
the
required
6
reserves
of
state
credit
unions,
which
are
institutions
7
organized
in
Iowa
and
exempt
from
the
federal
income
tax.
8
The
bill
includes
credit
unions
incorporated
in
Iowa
as
well
9
as
under
the
laws
of
another
state
within
the
definition
of
10
“financial
institution”
for
purposes
of
the
state
franchise
11
tax
on
financial
institutions,
thereby
imposing
the
state
12
franchise
tax
on
state
and
out-of-state
credit
unions.
The
13
bill
also
imposes
the
state
franchise
tax
on
agricultural
14
credit
associations
that
are
members
of
the
farm
credit
system
15
under
the
federal
Farm
Credit
Act.
16
The
bill
modifies
the
state
franchise
tax
to
provide
that
17
neither
the
state
alternative
minimum
franchise
tax
(AMT
tax),
18
a
component
of
the
state
franchise
tax,
nor
the
associated
19
alternative
minimum
tax
credit
for
previous
AMT
tax
paid,
20
applies
to
financial
institutions
that
are
exempt
from
the
21
federal
income
tax.
The
bill
amends
the
definition
of
“net
22
income”
upon
which
the
state
franchise
tax
is
computed
to
23
provide
that
“net
income”
for
a
financial
institution
that
is
24
exempt
from
the
federal
income
tax
means
the
total
revenue
25
less
total
expenses
as
properly
reported
on
the
financial
26
institution’s
internal
revenue
service
form
990
(return
of
27
organization
exempt
from
income
tax)
for
the
same
period,
with
28
the
adjustments
provided
under
current
law
for
other
financial
29
institutions
to
the
extent
such
adjustments
are
applicable
to
30
the
federally
tax-exempt
financial
institution’s
calculation
of
31
revenues
and
expenses,
as
determined
by
the
director
by
rule.
32
The
bill
provides
that
a
federally
tax-exempt
financial
33
institution’s
state
franchise
tax
is
due
at
the
end
of
the
34
taxable
year
and
will
be
considered
delinquent
if
not
paid
and
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filed
within
five
months
of
that
date.
1
Under
current
law,
the
state
franchise
tax
rate
is
5
percent
2
on
all
net
income
of
a
financial
institution.
The
bill
3
reduces
the
state
franchise
tax
rate
to
2
percent
on
the
first
4
$7.5
million
of
net
income,
and
4
percent
on
all
net
income
5
exceeding
$7.5
million.
6
All
revenues
arising
from
the
state
franchise
tax
are
7
deposited
in
the
general
fund
of
the
state
by
operation
of
8
law.
The
state
moneys
and
credits
tax
revenues
were
shared
9
among
cities,
counties,
and
the
state
according
to
a
statutory
10
formula.
11
The
bill
makes
numerous
conforming
amendments
throughout
the
12
Code
to
remove
references
to
the
state
moneys
and
credits
tax.
13
The
bill
provides
that
the
repeal
of
the
state
moneys
and
14
credits
tax
shall
not
affect
tax
credits
issued,
awarded,
15
or
allowed
before
January
1,
2019,
including
tax
credit
16
carryforward
amounts,
and
that
any
credits
that
would
have
been
17
eligible
to
be
claimed
on
or
after
January
1,
2019,
against
18
the
state
moneys
and
credits
tax
shall
be
allowed
against
the
19
franchise
tax.
20
The
division
takes
effect
January
1,
2019,
and
applies
to
tax
21
years
beginning
on
or
after
that
date.
22
DIVISION
V
——
CHANGES
TO
IOWA
EDUCATIONAL
SAVINGS
PLAN
TRUST
23
AND
IOWA
ABLE
SAVINGS
PLAN
TRUST.
Division
V
makes
several
24
changes
to
the
Iowa
educational
savings
plan
trust
in
Code
25
chapter
12D
(Iowa
529
plan),
the
disabilities
expenses
savings
26
plan
trust
in
Code
chapter
12I
(Iowa
ABLE
plan),
and
the
income
27
tax
treatment
of
contributions
to
and
withdrawals
from
such
28
plans.
29
IRC
§529,
which
governs
state
tuition
programs,
previously
30
required
that
in
order
for
a
state
tuition
program
to
be
31
considered
qualified
and
therefore
eligible
for
certain
32
federal
tax
benefits,
the
program
must
be
established
to
33
allow
contributions
for
the
purposes
of
funding
certain
34
qualifying
expenses
of
attendance
at
institutions
of
higher
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education.
Accordingly,
the
Iowa
529
plan
allows
participants
1
to
contribute
and
withdraw
funds
to
and
from
the
Iowa
529
plan
2
for
the
payment
of
higher
education
costs
related
to
attendance
3
at
institutions
of
higher
education.
4
The
federal
Tax
Cuts
and
Jobs
Act
of
2017
amended
IRC
5
§529
to
provide
that
during
each
tax
year,
up
to
$10,000
of
6
cash
distributions
from
all
qualified
tuition
programs
for
a
7
beneficiary
for
tuition
expenses
in
connection
with
enrollment
8
or
attendance
at
an
elementary
or
secondary
public,
private,
9
or
religious
school,
may
be
considered
a
distribution
for
10
qualified
higher
education
expenses
and
thus
excludable
from
11
income
for
federal
income
tax
purposes.
The
federal
Tax
12
Cuts
and
Jobs
Act
of
2017
also
provided
that
under
certain
13
conditions,
amounts
in
qualified
tuition
programs
may
be
14
transferred
to
a
qualified
ABLE
account
without
incurring
15
federal
income
tax
consequences.
16
The
bill
amends
the
Iowa
529
plan
to
provide
for
qualified
17
withdrawals
from
the
plan
for
elementary
or
secondary
school
18
tuition
as
is
now
allowed
under
federal
law
pursuant
to
the
19
federal
Tax
Cuts
and
Jobs
Act
of
2017.
The
bill
modifies
the
20
findings
and
purpose
provision
of
the
Iowa
529
plan
in
Code
21
section
12D.1(1)
by
striking
or
amending
specific
references
22
to
higher
education
and
institutions
of
higher
education
so
23
that
such
provisions
more
generally
reference
education
and
24
educational
institutions,
and
by
providing
that
the
Iowa
529
25
plan’s
purpose
is
to
make
available
an
opportunity
to
invest
in
26
a
public
trust
to
fund
future
formal
education
needs.
27
The
bill
strikes
the
definition
of
“higher
education
costs”,
28
as
well
as
numerous
references
to
that
term
throughout
the
Iowa
29
529
plan,
and
replaces
them
with
the
term
“qualified
education
30
expenses”,
which
is
defined
in
the
bill
to
mean
the
same
as
31
qualified
higher
education
expenses
as
defined
in
IRC
§529,
32
including
elementary
and
secondary
school
tuition
to
the
extent
33
such
tuition
amounts
are
described
and
allowed
under
IRC
§529.
34
The
bill
also
replaces
numerous
references
to
“institution
35
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of
higher
education”
throughout
the
Iowa
529
plan
with
1
references
to
a
“qualified
educational
institution”,
which
2
is
defined
in
the
bill
to
include
an
institution
of
higher
3
education
and
any
elementary
or
secondary,
public,
private,
or
4
religious
school
described
in
IRC
§529.
5
The
federal
Tax
Cuts
and
Jobs
Act
of
2017
also
amended
6
IRC
§529
to
allow
certain
transfers
from
a
qualified
tuition
7
program
to
an
ABLE
account
without
incurring
federal
income
tax
8
consequences.
The
bill
amends
the
Iowa
529
plan
to
provide
9
that
a
participant
may
transfer
amounts
in
an
Iowa
529
plan
to
10
an
ABLE
account,
including
the
Iowa
ABLE
plan,
if
the
transfer
11
is
permitted
under
IRC
§529.
The
Iowa
529
plan
is
further
12
amended
to
allow
the
transfer
of
funds
to
another
account
in
13
the
Iowa
529
plan,
if
the
transfer
is
permitted
under
IRC
§529.
14
Several
other
modifications
are
made
to
the
Iowa
529
plan
15
to
remove
references
to
the
imposition
of
penalties
for
16
cancellation
and
late
payments
under
the
trust,
to
remove
17
certain
references
to
the
ability
to
amend
participation
18
agreements,
to
describe
rules
and
procedures
for
determining
19
account
successors
in
the
case
of
death
of
a
participant,
and
20
to
modify
the
permissible
investment
direction
that
may
be
21
provided
by
participants
and
beneficiaries
under
the
trust.
22
Finally,
the
bill
adds
Iowa
529
plan
accounts
to
the
list
of
23
exemptions
from
execution
under
Code
section
627.6.
24
Under
current
law
in
Code
section
422.7(32)(c),
previously
25
tax-deducted
contributions
to
an
Iowa
529
plan
that
are
26
withdrawn
for
purposes
other
than
the
payment
of
qualified
27
education
expenses
are
required
to
be
added
back
to
income
28
in
computing
Iowa
individual
income
tax.
The
bill
amends
29
this
provision
to
provide
that
Iowa
529
plan
withdrawals
of
30
previously
tax-deducted
contributions
must
be
added
back
to
31
Iowa
income
unless
the
amount
is
a
withdrawal
or
transfer
32
for
one
of
three
eligible
purposes.
First,
for
the
payment
33
of
qualified
higher
education
expenses.
Second,
for
the
34
payment
of
tuition
to
an
elementary
or
secondary
school
if
the
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tuition
amounts
are
qualified
education
expenses.
Third,
for
a
1
change
in
beneficiaries
under,
or
transfer
to
another
account
2
within,
the
Iowa
529
plan,
or
a
transfer
to
the
Iowa
ABLE
plan,
3
provided
such
beneficiary
change
or
transfer
is
permitted
under
4
the
Iowa
529
plan.
The
bill
defines
“institution
of
higher
5
education”
and
“tuition”
to
mean
the
same
as
defined
under
6
the
Iowa
529
plan.
The
bill
defines
“elementary
or
secondary
7
school”
to
mean
an
elementary
or
secondary
school
in
this
state
8
which
is
accredited
under
Code
section
256.11
(educational
9
standards),
and
adheres
to
the
provisions
of
the
federal
10
Civil
Rights
Act
of
1964
and
Code
chapter
216
(civil
rights
11
commission).
The
bill
defines
“qualified
higher
education
12
expenses”
to
mean
the
same
as
defined
under
IRC
§529.
13
The
bill
amends
the
income
tax
treatment
of
contributions
14
to
and
withdrawals
from
the
Iowa
ABLE
plan
to
provide
that
a
15
contribution
shall
not
be
deducted
from
Iowa
income
tax
to
the
16
extent
it
represents
a
transfer
from
the
Iowa
529
plan
that
was
17
previously
deducted
as
a
contribution
to
the
Iowa
529
plan,
18
and
that
amounts
resulting
from
a
cancellation
or
withdrawal
19
from
the
Iowa
ABLE
plan
for
purposes
other
than
the
payment
of
20
qualified
disability
expenses
shall
be
added
back
to
income
in
21
computing
Iowa
individual
income
tax
to
the
extent
the
amount
22
was
previously
transferred
from
the
Iowa
529
plan
and
deducted
23
as
a
contribution
to
the
Iowa
529
plan.
24
The
division
takes
effect
upon
enactment
and
applies
25
retroactively
to
January
1,
2018,
for
withdrawals
and
transfers
26
from
the
Iowa
educational
savings
plan
trust
made
on
or
after
27
that
date,
and
for
tax
years
beginning
on
or
after
that
date.
28
DIVISION
VI
——
SALES
AND
USE
TAXES.
Division
VI
makes
29
numerous
changes
to
the
sales
and
use
taxes,
including
the
30
local
option
sales
tax.
31
SPECIFIED
DIGITAL
PRODUCTS.
The
bill
imposes
the
sales
and
32
use
tax
at
a
rate
of
six
percent
on
the
sale
or
use
of
specified
33
digital
products
in
Iowa.
The
bill
defines
“specified
digital
34
products”
as
electronically
transferred
digital
audio-visual
35
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works,
digital
audio
works,
digital
books,
or
other
digital
1
products.
These
and
other
related
terms
are
defined
in
2
the
bill
in
new
Code
section
423.1(55A).
The
sales
or
use
3
tax
applies
whether
the
purchaser
obtains
permanent
use
or
4
less
than
permanent
use
of
the
specified
digital
product,
5
whether
the
sale
or
use
is
conditioned
or
not
conditioned
upon
6
continued
payment
from
the
purchaser,
and
whether
the
sale
or
7
use
is
on
a
subscription
basis
or
is
not
on
a
subscription
8
basis.
The
bill
also
provides
that
the
sale
or
use
of
digital
9
code
that
may
be
used
to
obtain
or
access
a
specified
digital
10
product
at
a
later
date
is
taxed
in
the
same
manner
as
a
11
specified
digital
product.
12
The
bill
creates
an
exemption
for
the
sale
or
use
of
13
specified
digital
products
to
a
non-end
user,
as
defined
in
the
14
bill.
15
The
bill
amends
numerous
existing
sales
and
use
tax
16
exemptions
to
include
specified
digital
products,
including
17
the
following:
sales
the
state
is
prohibited
from
taxing
18
under
the
United
States
Constitution
or
the
Iowa
Constitution;
19
sales
to
certain
nonprofit
corporations,
organizations,
20
educational
institutions,
legal
aid
organizations,
museums,
21
art
centers,
organ
procurement
organizations,
hospitals,
or
22
hospice
facilities;
sales
by
a
state
fair;
sales
to
political
23
subdivisions;
sales
by
counties
or
cities;
casual
sales;
sales
24
of
property
which
will
be
distributed
as
prizes
to
players
25
of
certain
amusement
games;
sales
to
recognized
community
26
action
agencies;
uses
of
property
for
which
the
sales
tax
has
27
already
been
paid;
sales
in
the
regular
course
of
business;
28
and
property
brought
into
Iowa
by
a
nonresident
and
used
here
29
temporarily.
The
bill
amends
a
sales
tax
refund
provision
30
relating
to
relief
agencies
that
purchase
property
for
free
31
distribution
to
the
poor
to
include
purchases
of
specified
32
digital
products.
33
The
bill
makes
certain
other
conforming
amendments
related
34
to
the
treatment
of
specified
digital
products
for
purposes
35
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of
the
administration
of
the
sales
and
use
taxes.
The
bill
1
provides
that
the
imposition
of
tax
on
the
sale
or
use
of
2
specified
digital
products
shall
not
be
construed
as
affecting
3
the
taxability
or
nontaxability
under
other
provisions
of
4
existing
law
of
sales
or
uses
occurring
prior
to
the
enactment
5
of
this
division
of
this
Act
of
products
meeting
the
definition
6
of
“specified
digital
products”.
7
SUBSCRIPTIONS
AND
PAY
TELEVISION
SERVICE.
The
bill
amends
8
the
definition
of
“sale”
in
Code
section
423.1(50)
for
purposes
9
of
the
sales
tax
to
provide
that
a
sale
includes
but
is
not
10
limited
to
any
transfer,
exchange,
or
barter
on
a
subscription
11
basis.
The
bill
defines
“subscription”
in
new
Code
section
12
423.1(57A).
13
The
bill
amends
the
taxable
service
of
pay
television
to
14
provide
that
pay
television
includes
but
is
not
limited
to
15
streaming
video,
video
on-demand,
and
pay-per-view.
16
The
bill
provides
that
it
is
the
intent
of
the
general
17
assembly
that
these
changes
to
the
definition
of
“sale”
and
18
“subscription”,
and
changes
to
the
service
of
pay
television,
19
are
conforming
amendments
consistent
with
current
state
law,
20
and
that
the
amendments
do
not
change
the
application
of
21
current
law
but
instead
reflect
current
law
both
before
and
22
after
the
enactment
of
these
changes.
23
These
changes
take
effect
July
1,
2018.
24
OTHER
CHANGES
TO
TAXABLE
SERVICES.
Under
current
law,
the
25
services
of
photography
and
retouching
are
subject
to
the
26
sales
and
use
tax,
but
such
services
are
taxed
as
if
they
were
27
sales
of
tangible
personal
property.
The
bill
strikes
these
28
provisions
treating
photography
and
retouching
as
tangible
29
personal
property,
and
adds
photography
and
retouching
to
the
30
list
of
enumerated
services
subject
to
the
sales
and
use
tax.
31
These
changes
to
photography
and
retouching
take
effect
July
32
1,
2018.
33
Current
law
provides
that
a
limousine
service
is
subject
34
to
the
sales
and
use
tax.
The
bill
modifies
this
service
to
35
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provide
that
a
personal
transportation
service
shall
be
subject
1
to
the
sales
and
use
tax,
and
includes
taxis,
driver
services,
2
ride
sharing
services,
rides
for
hire,
and
limousine
services
3
as
examples
of
the
types
of
services
which
qualify
as
a
taxable
4
personal
transportation
service.
5
Under
current
law,
the
furnishing
of
information
services,
6
as
defined
in
Code
section
423.3(66),
is
exempt
from
the
7
sales
and
use
tax.
The
bill
strikes
this
exemption
and
makes
8
information
services
a
taxable
service
for
purposes
of
the
9
sales
and
use
tax.
The
bill
defines
“information
services”.
10
The
bill
additionally
adds
the
following
services
to
the
11
list
of
enumerated
services
subject
to
the
sales
and
use
12
tax:
storage
of
tangible
or
electronic
files,
documents,
or
13
other
records;
services
arising
from
or
related
to
installing,
14
maintaining,
servicing,
repairing,
operating,
upgrading,
or
15
enhancing
specified
digital
products;
video
game
services
and
16
tournaments;
and
software
as
a
service.
17
OTHER
SALES
AND
USE
TAX
EXEMPTIONS.
Current
law
provides
18
a
sales
and
use
tax
exemption
for
access
charges
related
to
19
online
computer
services
in
Code
section
423.3(65),
and
for
any
20
retail
sale
delivered
electronically
in
Code
section
423.3(67).
21
The
bill
strikes
both
of
these
exemptions.
22
The
bill
creates
a
sales
and
use
tax
exemption
in
new
23
Code
section
423.3(103)
for
certain
sales
to
a
commercial
24
enterprise
for
use
exclusively
by
the
commercial
enterprise.
25
The
exemption
specifies
that
such
a
use
fails
to
qualify
as
26
a
use
exclusively
by
the
commercial
enterprise
if
its
use
27
for
noncommercial
purposes
is
more
than
de
minimis.
The
28
bill
provides
that
the
terms
“de
minimis”
and
“noncommercial
29
purposes”
shall
be
defined
by
the
director
of
revenue
by
30
rule.
The
bill
defines
“commercial
enterprise”
to
mean
the
31
same
as
defined
under
the
machinery
and
equipment
sales
and
32
use
tax
exemption
in
Code
section
423.3(47),
which
includes
33
businesses
and
manufacturers
conducted
for
profit
and
centers
34
for
data
processing
services
to
insurance
companies,
financial
35
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institutions,
businesses,
and
manufacturers,
but
excludes
1
professions
and
occupations
and
nonprofit
organizations.
2
The
exemption
applies
to
sales
of
specified
digital
3
products,
and
to
the
furnishing
of
the
following
enumerated
4
taxable
services:
storage
of
tangible
or
electronic
files,
5
documents,
or
other
records;
information
services;
services
6
arising
from
or
related
to
installing,
maintaining,
servicing,
7
repairing,
operating,
upgrading,
or
enhancing
specified
digital
8
products;
and
software
as
a
service.
9
The
bill
adds
the
sale
of
services
to
the
items
that
may
10
qualify
for
the
sales
and
use
tax
exemption
in
Code
section
11
423.3(63)
relating
to
items
purchased
for
the
purposes
of
12
providing
them
as
prizes
to
players
of
certain
amusement
games.
13
The
bill
creates
a
sales
and
use
tax
exemption
in
new
Code
14
section
423.3(105)
for
the
sale
of
a
grain
bin,
or
materials
15
used
to
construct
a
grain
bin.
The
bill
defines
“grain
bin”.
16
The
bill
also
repeals
numerous
sales
and
use
tax
exemptions
17
related
to
agricultural
production
and
creates
a
new
sales
and
18
use
tax
exemption
for
sales
of
tangible
personal
property
used
19
primarily
in
agricultural
production
by
a
commercial
farmer
if
20
the
cost
of
the
tangible
personal
property
is
properly
claimed
21
as
a
business
deduction
for
Iowa
income
tax
purposes
and
if
22
the
tangible
personal
property
is
used
on
land
eligible
for
23
the
agricultural
land
property
tax
credit.
The
bill
includes
24
several
categories
of
items
that
qualify
for
the
exemption,
and
25
modifies
the
definition
of
“agricultural
production”
in
Code
26
section
423.1(5).
27
The
bill
amends
the
definition
of
“manufacturer”
for
28
purposes
of
the
manufacturing
and
equipment
sales
and
use
tax
29
exemption
in
Code
section
423.3(47)
to
require
that
a
business
30
be
primarily
engaged
in
manufacturing
in
order
to
qualify
for
31
the
exemption.
The
definition
includes
several
examples
of
32
activities
that
do
and
do
not
qualify
as
manufacturing
for
33
purposes
of
the
exemption.
34
Finally,
the
bill
amends
the
sale-for-resale
exemption
35
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as
it
relates
to
certain
construction
equipment.
Under
1
current
law
in
Code
section
423.3(37),
the
lease
or
rental
2
of
machinery,
equipment,
attachments,
and
replacement
parts
3
directly
and
primarily
used
in
specified
construction
services
4
by
an
owner,
contractor,
subcontractor,
or
builder
is
exempt
5
from
the
sales
tax
(construction
equipment
exemption).
Also
6
under
current
law,
in
Code
section
423.3(2),
the
purchase
7
of
tangible
personal
property
for
subsequent
resale,
lease,
8
or
rental
is
exempt
from
the
sales
tax
(sale-for-resale
9
exemption).
However,
the
purchase
of
construction
equipment
10
for
a
subsequent
lease
or
rental
that
will
qualify
for
the
11
construction
equipment
exemption
does
not
qualify
for
the
12
sale-for-resale
exemption.
13
The
bill
amends
the
sale-for-resale
exemption
to
provide
14
that
the
purchase
of
construction
equipment
for
a
subsequent
15
lease
or
rental
that
will
qualify
for
the
construction
16
equipment
exemption
will
only
fail
to
qualify
for
the
17
sale-for-resale
exemption
if
the
sale
is
to
a
nonqualified
18
dealer.
The
bill
defines
“nonqualified
dealer”
to
mean
any
19
dealer
who
is
not
a
party
to
a
dealership
agreement,
as
those
20
terms
are
defined
in
Code
section
322F.1.
The
definitions
21
of
“dealer”
and
“dealership
agreement”
in
that
Code
section
22
respectively
include
persons
engaged
in
the
retail
sale
of
23
equipment
and
agreements
between
a
dealer
and
supplier
which
24
grant
the
dealer
the
right
to
sell,
distribute,
or
service
the
25
supplier’s
equipment.
26
SALES
AND
USE
TAX
NEXUS
AND
COLLECTION
REQUIREMENTS.
The
27
bill
modifies
the
requirement
of
persons
to
collect
and
remit
28
the
state
sales
and
use
taxes
and
the
local
option
sales
tax.
29
Current
law
requires
retailers
to
collect
sales
tax
for
taxable
30
items
sold
at
retail
in
the
state.
The
bill
defines
“sold
31
at
retail
in
the
state”
and
other
similar
terms
to
include
32
but
not
be
limited
to
sales
sourced
to
this
state
under
Code
33
chapter
423
(sales
and
use
tax),
and
provides
that
it
is
34
the
intent
of
the
general
assembly
that
the
definition
is
a
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conforming
amendment
consistent
with
current
state
law,
and
1
that
the
amendment
does
not
change
the
application
of
current
2
law
but
instead
reflects
current
law
both
before
and
after
the
3
enactment
of
the
definition.
The
enactment
of
the
definition
4
of
“sold
at
retail
in
the
state”
takes
effect
July
1,
2018.
5
Under
current
law,
Code
section
423.15
provides
general
6
rules
for
the
sourcing
of
sales
to
Iowa.
The
bill
amends
a
7
provision
in
this
Code
section
relating
to
when
sales
tax
8
applies
to
a
sale
sourced
to
Iowa,
to
provide
that
Iowa
sales
9
tax
applies
to
a
sale
sourced
to
Iowa
made
by
a
seller
who
is
a
10
retailer
maintaining
a
place
of
business
in
this
state,
or
who
11
is
subject
to
the
new
Code
section
423.14A
(described
below).
12
The
bill
also
amends
provisions
relating
to
the
requirement
13
of
retailers
maintaining
a
place
of
business
in
this
state
to
14
collect
use
tax
in
Code
sections
423.14
and
423.29,
to
provide
15
that
use
tax
shall
be
collected
by
retailers
not
otherwise
16
required
to
collect
sales
tax
under
Code
chapter
423
(sales
and
17
use
tax).
18
Under
current
law
in
Code
section
423B.5,
the
local
sales
and
19
services
tax
is
applicable
to
transactions
within
the
areas
of
20
the
county
imposing
the
tax.
The
bill
amends
this
provision
21
to
provide
that
a
transaction
occurring
within
the
taxing
area
22
includes
a
sale
sourced
to
a
location
in
that
area
pursuant
23
to
the
sourcing
rules
governing
the
sales
and
use
tax
(Code
24
sections
423.15
through
423.20).
25
The
bill
creates
new
Code
section
423.14A
that
deems
certain
26
persons,
or
agents
of
those
persons,
to
be
a
retailer
and
27
a
retailer
maintaining
a
place
of
business
in
this
state
28
on
or
after
January
1,
2019,
and
subjects
those
persons
to
29
all
requirements
of
Code
chapter
423
(sales
and
use
taxes),
30
including
but
not
limited
to
the
requirement
to
collect
and
31
remit
Iowa
sales
and
use
tax,
and
the
requirement
to
collect
32
and
remit
the
local
option
sales
tax.
The
bill
provides
that
33
the
requirements
in
Code
section
423.14A
are
in
addition
to,
34
and
not
in
lieu
of,
any
other
application
of
Code
chapter
423
35
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to
a
retailer
or
a
retailer
maintaining
a
place
of
business
in
1
this
state.
Qualifying
persons
required
to
collect
and
remit
2
Iowa
sales
and
use
tax
include
any
person
described
below.
For
3
purposes
of
any
threshold
requirement
described
below
that
4
involves
the
sales
of
taxable
items,
the
bill
defines
“Iowa
5
sales”
to
include
any
sale
sourced
to
this
state
under
Code
6
chapter
423,
or
otherwise
sold
in
this
state
or
for
delivery
7
into
this
state,
of
tangible
personal
property,
specified
8
digital
products,
or
services.
9
A
qualifying
person
includes
any
retailer
that
has
gross
10
revenue
from
Iowa
sales
equal
to
or
exceeding
$100,000
for
the
11
current
or
previous
calendar
year.
12
A
qualifying
person
includes
any
retailer
that
makes
Iowa
13
sales
in
200
or
more
separate
transactions
for
the
current
or
14
previous
calendar
year.
15
A
qualifying
person
includes
any
retailer
that
owns,
16
licenses,
or
uses
software
or
data
files
(as
defined
in
the
17
bill)
that
are
installed
or
stored
on
property
used
in
this
18
state.
19
A
qualifying
person
includes
any
retailer
that
uses
in-state
20
software
(as
defined
in
the
bill)
to
make
Iowa
sales.
21
A
qualifying
person
includes
any
retailer
that
provides,
or
22
enters
into
an
agreement
to
provide,
a
content
distribution
23
network
(as
defined
in
the
bill)
in
this
state
to
facilitate,
24
accelerate,
or
enhance
the
delivery
of
the
retailer’s
internet
25
site
to
purchasers.
However,
this
provision
does
not
apply
to
26
any
retailer
that
has
gross
revenue
from
Iowa
sales
of
less
27
than
$100,000
for
the
current
or
previous
calendar
year.
28
A
qualifying
person
includes
any
retailer
that
makes
Iowa
29
sales
through
a
marketplace
provider
(as
defined
in
the
bill).
30
However,
this
provision
does
not
apply
to
any
retailer
that
31
has
gross
revenue
from
Iowa
sales
of
less
than
$10,000
for
the
32
current
or
previous
calendar
year.
33
A
qualifying
person
includes
any
marketplace
provider
that
34
makes
or
facilitates
Iowa
sales
for
a
retailer
equal
to
or
35
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exceeding
$100,000,
or
in
200
or
more
separate
transactions
for
1
the
current
or
previous
year.
The
bill
requires
marketplace
2
providers
to
collect
Iowa
sales
and
use
tax
on
the
entire
3
sales
price
or
purchase
price
paid
the
purchaser,
regardless
4
of
the
amount
that
will
ultimately
accrue
to
or
benefit
the
5
marketplace
provider
or
any
other
person,
includes
other
6
provisions
related
to
marketplace
providers,
and
subjects
7
certain
marketplace
providers
and
retailers
described
in
the
8
bill
to
joint
and
several
liability
for
the
collection
and
9
payment
of
Iowa
sales
and
use
tax.
10
A
qualifying
person
includes
a
retailer
that
makes
Iowa
11
sales
through
the
use
of
a
solicitor
(as
defined
in
the
bill).
12
The
bill
creates
a
presumption
that
a
retailer
has
a
solicitor
13
in
this
state
under
certain
circumstances.
This
provision
does
14
not
apply
to
retailers
that
have
gross
revenue
from
Iowa
sales
15
referred
by
solicitors
of
$10,000
or
less
for
the
current
or
16
previous
calendar
year.
17
A
qualifying
person
includes
any
person
that
owns,
controls,
18
rents,
licenses,
makes
available,
or
uses
any
tangible
or
19
intangible
property
in
this
state
or
with
a
situs
in
this
state
20
to
make
or
facilitate
a
retail
sale.
21
A
qualifying
person
includes
any
person
that
enters
into
a
22
contract
or
agreement
with
a
governmental
entity,
as
defined
in
23
the
bill,
including
but
not
limited
to
contracts
or
agreements
24
for
the
provision
of
financial
assistance
or
incentives
such
as
25
a
tax
credit,
forgivable
loan,
grant,
tax
rebate,
or
any
other
26
thing
of
value.
This
provision
includes
certain
requirements
27
for
contractors
who
submit
bids
and
agreements
to
state
28
agencies
similar
to
language
in
current
Code
section
423.2(10).
29
The
bill
strikes
the
similar
language
under
existing
law
in
30
Code
section
423.2(10).
31
A
qualifying
person
includes
any
affiliate
or
any
retailer
32
that
is
required
to
collect
Iowa
sales
and
use
tax,
provided
33
the
affiliate
makes
retail
sales.
34
OTHER
MISCELLANEOUS
SALES
AND
USE
TAX
CHANGES.
The
bill
35
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moves
provisions
relating
to
the
deposit
and
transfer
of
sales
1
tax
revenues
in
Code
section
423.11
to
a
new
Code
section
2
423.2A,
and
makes
corresponding
changes
to
other
provisions
of
3
the
Code
that
reference
those
deposit
and
transfer
provisions.
4
The
bill
amends
the
definition
of
“lease
or
rental”,
“use”,
5
“use
tax”,
and
“user”
in
Code
section
423.1.
The
bill
also
6
amends
the
definition
of
“bundled
transaction”
in
Code
section
7
423.2(8)
to
incorporate
certain
language
also
included
in
8
the
definition
of
“bundled
transaction”
for
purposes
of
the
9
streamlined
sales
tax
agreement,
of
which
Iowa
is
a
member
10
state.
The
changes
to
the
definition
of
bundled
transaction
11
take
effect
July
1,
2018.
12
The
bill
defines
“personal
property”
for
purposes
of
the
13
sales
and
use
tax
to
include
but
not
be
limited
to
tangible
14
personal
property
and
specified
digital
products.
15
The
bill
amends
the
definition
of
“place
of
business”
in
16
Code
section
423.1
to
include
places
where
specified
digital
17
products
or
services
are
offered
for
sale,
and
provides
that
18
it
is
the
intent
of
the
general
assembly
that
the
change
to
19
the
definition
is
a
conforming
amendment
consistent
with
20
current
state
law,
and
that
the
amendment
does
not
change
the
21
application
of
current
law
but
instead
reflects
current
law
22
both
before
and
after
the
enactment
of
the
change.
These
23
changes
to
the
definition
of
“place
of
business”
take
effect
24
July
1,
2018.
25
The
bill
provides
that
when
any
retailer
required
under
26
Iowa
law
to
collect
and
remit
sales
and
use
tax
fails
to
do
27
so,
the
retailer
and
any
affiliate
that
directly,
indirectly,
28
or
constructively
controls
the
retailer
shall
be
held
jointly
29
and
severally
liable
for
the
tax
and
any
resulting
penalty
and
30
interest,
regardless
of
whether
the
affiliate
is
a
retailer.
31
The
bill
provides
the
department
the
authority
to
assess
32
the
full
amount
of
any
tax,
penalty,
or
interest
against
33
the
retailer
and
these
affiliates,
and
gives
the
department
34
discretion
to
disregard
or
look
through
any
organizational
35
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structure
of
an
enterprise
to
assess
tax,
penalty,
and
interest
1
against
an
affiliate
of
a
retailer.
The
term
“affiliate”
for
2
purposes
of
these
provisions
is
defined
under
existing
law
in
3
Code
section
423.1(2).
4
Finally,
the
bill
adds
several
Code
sections
relating
to
5
the
requirement
to
collect
sales
and
use
tax
to
the
provisions
6
for
which
failure
to
comply
may
subject
a
retailer
to
personal
7
liability
under
Code
section
421.26.
8
EFFECTIVE
DATE
PROVISIONS.
Except
as
otherwise
provided
9
above,
the
division
takes
effect
January
1,
2019.
10
DIVISION
VII
——
HOTEL
AND
MOTEL
EXCISE
TAX
AND
AUTOMOBILE
11
RENTAL
EXCISE
TAX.
The
bill
amends
the
hotel
and
motel
excise
12
tax
in
Code
chapter
423A
and
the
automobile
rental
excise
tax
13
in
Code
chapter
423C
to
expand
the
types
of
persons
who
must
14
collect
and
remit
the
excise
taxes,
and
to
make
other
changes
15
to
the
administration
of
the
taxes.
16
Current
law
requires
lessors,
as
defined
with
respect
to
17
each
excise
tax,
to
collect
the
excise
tax.
The
bill
amends
18
the
definition
of
“lessor”
under
each
tax
to
more
broadly
19
include
any
person
who
acquires
a
right
or
interest
in
lodging
20
or
an
automobile,
any
person
who
actually
or
constructively
21
rents
lodging
or
an
automobile,
lodging
facilitators
and
rental
22
facilitators,
and
retailers
who
would
be
required
to
collect
23
the
excise
taxes
if
the
excise
taxes
were
a
sales
and
use
tax
24
under
Code
chapter
423.
The
bill
defines
a
lodging
facilitator
25
with
respect
to
the
hotel
and
motel
excise
tax,
and
defines
a
26
rental
facilitator
with
respect
to
the
automobile
rental
excise
27
tax,
to
include
certain
persons
who
facilitate
the
renting
of
28
the
taxable
items
by
directly
or
indirectly
performing
certain
29
acts
with
regard
to
the
rental
transaction.
The
bill
modifies
30
the
definition
of
“sales
price”
for
purposes
of
the
hotel
31
and
motel
excise
tax
and
“rental
price”
with
respect
to
the
32
automobile
rental
excise
tax.
33
The
bill
repeals
an
exemption
from
the
hotel
and
motel
excise
34
tax
provided
for
the
renting
of
rooms
in
a
memorial
union
of
an
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Iowa
college
or
university,
and
expands
an
exemption
for
the
1
renting
of
rooms
in
certain
religious
institutions
so
that
it
2
also
applies
to
the
state
and
local
hotel
and
motel
excise
tax.
3
Under
current
law,
that
exemption
only
applies
to
the
local
4
hotel
and
motel
excise
tax.
5
The
bill
modifies
the
definition
of
“lodging”
for
purposes
6
of
the
hotel
and
motel
excise
tax
to
include
a
cabin,
7
apartment,
or
residential
property.
The
bill
provides
that
it
8
is
the
intent
of
the
general
assembly
that
the
change
to
the
9
definition
of
“lodging”
is
a
conforming
amendment
consistent
10
with
current
state
law,
and
that
the
amendments
do
not
change
11
the
application
of
current
law
but
instead
reflect
current
law
12
both
before
and
after
the
enactment
of
these
changes.
The
13
changes
to
the
definition
of
“lodging”
take
effect
July
1,
14
2018.
15
Finally,
the
bill
provides
that
if
a
transaction
under
16
either
excise
tax
involves
both
a
lessor
and
a
lodging
17
facilitator
or
rental
facilitator,
as
applicable,
then
both
18
parties
will
be
jointly
and
severally
liable
for
the
applicable
19
tax,
and
further
provides
that
the
lodging
facilitator
or
20
rental
facilitator
shall
collect
the
entire
amount
of
tax
21
due
on
the
transaction,
regardless
of
the
amount
that
will
22
ultimately
accrue
to
the
benefit
of
the
lodging
facilitator
or
23
rental
facilitator,
or
any
other
person.
24
EFFECTIVE
DATE
PROVISIONS.
Except
as
otherwise
provided
25
above,
the
division
takes
effect
January
1,
2019.
26
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