Relating to the administration of the tax and related laws by the department of revenue, including the administration and modification of certain tax credits and refunds, the individual and corporate income taxes, franchise taxes, franchise alternative minimum taxes, moneys and credits taxes, sales and use taxes, and automobile rental excise taxes, the assessment of property owned by certain long distance telephone companies, establishing a taxation and exemption of computers task force, and providing for other properly related matters, making penalties applicable, and including effective date and retroactive applicability provisions

11S also specify that a school tuition organization shall be controlled by a board of directors consisting of at least seven members. Under current law, the board of directors shall be seven members.11S are conforming amendments consistent with current law, and that the amendments do not change the application of current law.12C specifies that a nonresident or part-year resident shall determine their early childhood development tax credit in the ratio of the taxpayer’s Iowa source net income to their all source net income.12C takes effect upon enactment and applies retroactively for tax years beginning on or after January 1, 2019.12C(4), as amended by the bill.60 aligns the definition of “Internal Revenue Code” for franchise alternative minimum tax purposes with the definition of “Internal Revenue Code” for corporate alternative minimum tax purposes.60 applies retroactively for tax years beginning on or after January 1, 2019. The bill provides for a deferral of a gain or loss resulting from exchanging of property (1031 exchange) that meet certain conditions. The federal Tax Cuts and Jobs Act of 2017 repealed 1031 exchanges with respect to exchanges of personal property. The Iowa tax bill enacted last year (2018 Iowa Acts, chapter 1161) decouples, for Iowa individual tax purposes, from the federal repeal of 1031 exchanges relating to personal property, and permits individuals to defer gain or loss on qualifying personal property for tax year 2019 to the extent such deferral would have been permitted under federal law prior to its amendment by the federal Tax Cuts and Jobs Act of 2017. The bill permits a corporation or financial institution, for Iowa corporate income tax or franchise income tax purposes, the same deferral of gain or loss as individuals on qualifying personal property for tax year 2019 to the extent such deferral would have been permitted under federal law prior to its amendment by the federal Tax Cuts and Jobs Act of 2017. The 1031 exchange provision takes effect upon enactment, and applies retroactively for tax years beginning January 1, 2019, but before January 1, 2020. DIVISION II —— ADMINISTRATIVE PROVISIONS.72 permit the department of revenue, by rule, to disclose state tax information to a person a taxpayer has identified to receive such information in the manner prescribed by the department of revenue. DIVISION III —— SALES AND USE TAX.2(1) provides that if a service or warranty contract does not specify a fee amount for nontaxable services or taxable personal property, the sales tax shall be imposed upon an amount equal to the sales price of the contract. Currently, the sales tax is imposed upon an amount equal to one-half of the sales price of such a contract.2(6) specifies that the sales price from the furnishing of carpentry repair and installation services are subject to the sales tax. Currently, carpentry services are subject to sales tax.3(16A), exempting from the state sales and use tax the purchase price of a grain bin, including material or replacement parts used to construct or repair a grain bin. “Grain bin” is defined to mean property that is vented and covered with corrugated metal or similar material, and that is primarily used to hold loose grain for drying or storage. This provision takes effect upon enactment and applies retroactively to January 1, 2004, and applies to tax years beginning on or after that date.3(16A). The bill limits the refunds to $25,000 in the aggregate.3(47) changes the exclusions from the sales tax exemptions in that subsection by aligning the exclusions with the changes made to the exemptions enacted in 2016 Iowa Acts, chapter 1007. This provision takes effect upon enactment and applies retroactively to tax years beginning January 1, 2016, for tax years beginning on or after that date.3(104) exempts from the sales tax the sales of optional service or warranty contracts for computer software maintenance or support services furnished to a commercial enterprise used exclusively by the commercial enterprise.3(104).14A(1)(a), shall collect and remit sales, use, and local option taxes, if the retailer has gross revenue from Iowa sales equal to or exceeding $100,000 for an immediately preceding calendar year or a current calendar year, or has 200 or more separate transactions for an immediately preceding calendar year or a current calendar year.14A(3)(b) by striking the requirement that retailers making Iowa sales collect such taxes if the retailer has 200 or more separate transactions for an immediately preceding calendar year or a current calendar year.14A(1)(a), collect sales, use, and local option taxes if the marketplace facilitator has 200 or more separate transactions for an immediately preceding calendar year or a current calendar year. The bill does not strike the requirement that a marketplace facilitator collect such taxes if the marketplace facilitator makes or facilitates Iowa sales on its own behalf or for one or more marketplace sellers equal to or exceeding $100,000.14A(1)(a), collect sales, use, and local option taxes if the referrer has 200 or more separate transactions for an immediately preceding calendar year or a current calendar year. The bill does not strike the requirement that a referrer collect such taxes if the referrer has Iowa sales equal to or exceeding $100,000. Currently, a referrer is required to provide the department of revenue, on a monthly basis, a list of marketplace sellers who collect and remit Iowa sales and use tax on the platform of the referrer. Otherwise, the referrer is required to collect and remit Iowa sales and use tax.14(3)(e)(1) are met.14A(3)(e)(5) specifying that the paragraph relating to “referrers” is subject to implementation by the department of revenue by rule, and shall not require a referrer to collect tax or comply with the notice and reporting requirements unless such administrative rules take effect.48(2)(c) by striking the paragraph specifying that registering under the streamlined sales and use tax agreement in another member state shall be considered to be registered in this state for purposes of the streamlined sales and use tax agreement. The bill establishes a taxation and exemption computers task force to be initiated, coordinated, and staffed by the department of revenue.3(47)(a)(4).3(47)(a)(4), the department of revenue shall provide any recommendations to the general assembly by January 1, 2020. DIVISION IV —— AUTOMOBILE RENTAL EXCISE TAX.14A provides that a person who is not required to collect and remit automobile rental excise tax shall not be considered a “marketplace facilitator” with respect to the sale of certain transportation services.2.1, which includes facilitation fees, reservation fees, service fees, nonrefundable deposits, and any other direct or indirect charge made or consideration provided in connection with the renting or facilitation of renting automobiles.3 strikes the definitions of “discount rental charge” and “travel package”.3 specifies that the automobile rental excise tax shall be imposed upon the rental price of an automobile if the rental is subject to the state sales or use tax.3 relating to the collection of the automobile rental excise tax by a “rental facilitator” and “rental platform” due to these definitions being stricken by another part of this division of the bill.3 requires that any person required to collect state sales and use tax on the rental transaction under Code chapter 423 shall collect the automobile rental excise tax as applicable.3 provides that a person is not required to collect and remit the automobile rental excise tax if the person meets certain circumstances.3 requires an automobile provider to be solely liable for any amount of uncollected or unremitted automobile rental excise tax and sales and use tax under Code chapter 423. DIVISION V —— TELEPHONE COMPANY PROPERTY. Division V of the bill authorizes the Iowa utilities board to classify a long distance telephone company as a competitive long distance telephone company if certain revenue source criteria are met. In the event of such a classification, the board is required to promptly notify the director of revenue. Upon such notification by the board, the director of revenue is required to assess the property of such competitive long distance telephone company, which property is first assessed for taxation in this state on or after January 1, 1996, in the same manner as all other property assessed as commercial property by the local assessor. The provisions established in the bill are the same as provisions repealed on July 1, 2018, by 2018 Iowa Acts, chapter 1160.1D, subsection 10, takes effect upon enactment and applies retroactively to July 1, 2018, for assessment years beginning on or after that date.1D, subsection 10, as enacted in the bill, effective July 1, 2021.1D, subsection 10, applies to assessment years beginning on or after January 1, 2022. DIVISION VI —— CHILDHOOD AND DEPENDENT CARE CREDIT AND EARLY CHILDHOOD DEVELOPMENT CREDIT.12C(4) increases the Iowa net income threshold levels for purposes of calculating the Iowa child and dependent child care tax credit and the early childhood development tax credit available against the individual income tax. The Iowa child and dependent care tax credit is a refundable credit calculated as a percentage of the nonrefundable federal child and dependent care tax credit, depending on the Iowa net income of the taxpayer. The early childhood development tax credit is a refundable credit equaling percent of the first $1,000 which the taxpayer has paid to others for each dependent ages three through five for early childhood development expenses. IOWA CHILD AND DEPENDENT CHILD CARE TAX CREDIT. Currently, there are seven graduated Iowa net income thresholds used to calculate the credit. The bill increases these graduated thresholds, but does not change the percentage of the nonrefundable federal child and dependent care tax credit used to calculate the Iowa child and dependent child care tax credit. Currently, the credit percentages in these seven Iowa net income thresholds range from a high of percent of the federal credit for taxpayers with net income of less than $10,000, to a low of percent of the federal credit for taxpayers with net income of $40,000 or more but less than $45,000. Under the bill, the credit percentages in the thresholds range from a high of percent of the federal credit for taxpayers with a net income of less than $12,750, to a low of percent of the federal credit for taxpayers with net income of $50,980 or more but less than $57,360. The bill also adjusts the future amount of each of the Iowa net income amounts in the seven graduated Iowa net income thresholds by indexing the thresholds to inflation. EARLY CHILDHOOD DEVELOPMENT TAX CREDIT. The bill increases the income threshold determining the eligibility of a taxpayer for the early childhood development tax credit. The bill increases the eligibility threshold from a taxpayer earning $45,000 per year to $57,360 per year. By increasing the eligibility threshold, taxpayers earning less than $57,360 are now eligible to take the early childhood development tax credit equaling percent of the first $1,000 which the taxpayer has paid to others for early childhood development expenses for each dependent ages three through five. The bill also adjusts the future amount of the net income threshold by indexing the threshold to inflation. EFFECTIVE DATE AND APPLICABILITY. The division takes effect upon enactment and applies retroactively to tax years beginning on or after January 1, 2019. DIVISION VII —— APPORTIONMENT OF CERTAIN BUSINESS INCOME OF AN AIRLINE.33(2)(a)(2) relates to the apportionment of income of an airline and of a qualified air freight forwarder for purposes of the Iowa corporate income tax. A corporation doing business both within and without Iowa is required to apportion its business income among Iowa and the other states in which it does business. The amount of business income apportioned to Iowa is generally in the same percentage as the business’s gross sales made within Iowa if the business involves the manufacture or sale of goods and products, or in the same percentage as the business’s gross receipts earned within Iowa if the business involves something other than the manufacture or sale of goods and products. However, airlines and other specified industries have special rules provided by administrative rule for apportioning the income of those industries.7(2), an airline deriving income from transportation operations is required to apportion its business income to Iowa in the same proportion that its mileage traveled in Iowa bears to its total mileage traveled everywhere.7(2). The bill also provides rules for apportioning income derived by a qualified air freight forwarder from transportation operations through an affiliated airline. The bill defines “qualified air freight forwarder” to be a taxpayer that is primarily engaged in the facilitation of the transportation of property by air, and that does not itself operate aircraft but that is in the same affiliated group as an airline. The bill states that the qualified air freight forwarder income derived from transportation operations shall be apportioned to Iowa either under the current rules of the director of revenue (current statutory rules), or in the same proportion that the miles of the qualified air freight forwarder’s affiliated airline traveled in this state bears to the total miles of the affiliated airline traveled everywhere (affiliated airline mileage rules), based on increasing percentages as enumerated in the bill over a number of tax years. The division applies to tax years beginning on or after January 1, 2020. DIVISION VIII —— BURIAL TRUSTS.7(6) by exempting from the individual income tax interest and earnings received from a burial trust fund. DIVISION IX —— ADOPTION TAX CREDIT.12A relates to claiming the adoption tax credit for qualified adoption expenses paid or incurred by an individual taxpayer during a tax year. Currently, in order to claim the adoption tax credit the taxpayer must pay or incur “qualified adoption expenses” during the tax year, which are unreimbursed, and connected with the adoption. The bill strikes the requirement that the “qualified adoption expenses” be paid or incurred by the taxpayer during the tax year. The bill specifies that if a qualified adoption expense is incurred prior to or during the tax year in which the adoption becomes final, the qualified adoption expense shall be allowed during the tax year in which the adoption becomes final. For qualified adoption expenses incurred after the tax year in which the adoption becomes final, the qualified adoption expense shall be allowed during the tax year such adoption expense was paid or incurred. The division applies retroactively to tax years beginning on or after January 1, 2019. DIVISION X —— TARGETED JOBS WITHHOLDING CREDIT.19A extends by four years the deadline for entering into withholding agreements under the targeted jobs withholding credit pilot project from June 30, 2019, to June 30, 2023. This amendment takes effect upon enactment. DIVISION XI —— SCHOOL TUITION ORGANIZATION TAX CREDITS.11S increases the total amount of school tuition organization tax credits that may be issued per tax year to $17 million from $13 million for tax years beginning on or after January 1, 2020.11S in another division of the bill. DIVISION XII —— DEDUCTING RESIDUAL FERTILIZER.7(60), which relates to deducting residual fertilizer supply in the soil for purposes of individual and corporate income taxes. The bill defines “residual fertilizer supply” to mean an asset or an improvement to land that meets all of the following requirements: the asset or improvement consists of residual fertilizer or excess available nutrients that are in the soil; the land upon which the asset or improvement is located is sold or exchanged; and following the sale or exchange of the land containing the residual fertilizer supply, an expense deduction, amortization deduction, or depreciation deduction is allowable for federal tax purposes with respect to the residual fertilizer in the hands of a taxpayer other than the seller of the land. The bill provides that for any sale or exchange of a land containing residual fertilizer supply executed on or after July 1, 2019, an expense deduction, depreciation deduction, or amortization deduction with respect to the residual fertilizer supply shall not be allowed for individual or corporate income tax purposes unless all of the following requirements are satisfied: the expense deduction, depreciation deduction, or amortization deduction is allowable to the taxpayer under the Internal Revenue Code; and the residual fertilizer supply is part of a written agreement between the seller and buyer that identifies the residual fertilizer supply and the consideration paid for the residual fertilizer supply. If a taxpayer has taken a deduction relating to residual fertilizer supply in computing federal adjusted gross income that is disallowed under the bill, the taxpayer shall make the following adjustments: add back the total amount of the deduction in computing net income for state tax purposes; reallocate the amount of the deduction to the taxpayer’s basis, if any, in the land upon which the residual fertilizer supply is located; and make any other adjustments to gains, losses, deductions, or tax basis of assets pursuant to rules adopted by the director of revenue. DIVISION XIII —— FRANCHISE TAX —— ALTERNATIVE MINIMUM TAX (AMT) REPEAL. Current law imposes an AMT on a financial institution to the extent the AMT exceeds the financial institution’s regular tax liability. The AMT is generally calculated by adding certain “preference” items (deductions, exemptions, and other adjustments) back to taxable income, applying an exemption amount, and then multiplying the resulting income amount by an AMT rate.60 repeal the AMT for the franchise tax beginning in tax year 2021. Current law also provides an alternative minimum tax credit, which allows AMT paid by a financial institution in prior tax years to be claimed against regular tax liability in future tax years if the financial institution is not subject to the AMT in that year. With the repeal of the franchise AMT in 2021, the bill allows a taxpayer to claim any remaining alternative minimum tax credit against the financial institution’s regular tax liability for the 2021 tax year, and the bill then repeals the alternative minimum tax credit beginning in tax year 2022. DIVISION XIV —— FEDERAL RESEARCH CREDIT —— INTERNAL REVENUE CODE. The Consolidated Appropriations Act of 2018 (Pub. L. 115-141), which Iowa is conformed to for tax year 2019 and beyond, struck and renumbered a provision of the federal research credit, which resulted in a renumbering of the simplified credit in the Internal Revenue Code. The amendments in the division change the Internal Revenue references in the Iowa Code to reflect the changes to the references in the Internal Revenue Code. The division applies retroactively to January 1, 2019, and applies to tax years beginning on or after that date. DIVISION XV —— RESEARCH ACTIVITIES TAX CREDIT.10(1)(a) specify that the research and activities tax credit is available against the individual income tax if an individual is engaged in agriscience or agricultural animal production, and if certain conditions are met.33(5)(e)(1) specify that a corporation engaged in agriscience or agricultural animal production shall be eligible for the research activities tax credit if certain conditions are met. The bill defines “agricultural animal production” to mean activities related to producing or maintaining an agricultural animal. The division takes effect upon enactment and applies retroactively to tax years beginning on or after January 1, 2017. DIVISION XVI —— NEW JOBS CREDIT —— FRANCHISE TAX.60 makes the new jobs tax credit under Code chapter 260E available against franchise taxes imposed on financial institutions. DIVISION XVII —— UTILITY REPLACEMENT TASK FORCE.15 extends the utility replacement tax task force from January 1, 2019, to January 1, 2029. The task force is charged with studying the effects of the replacement taxes under Code chapter 437A (taxes on electricity and natural gas providers) and Code chapter 437B (taxes on rate-regulated water utilities) on local taxing authorities, local taxing districts, consumers, and taxpayers. DIVISION XVIII —— MONEYS AND CREDITS TAX ON STATE CREDIT UNIONS.329(3). DIVISION XIX —— SALES AND USE TAX EXEMPTIONS RELATED TO MANUFACTURERS.3(47)(d)(4)(c) modifies the definition of “manufacturer” relating to the sales and use tax exemption for machinery, equipment, and other items used directly and primarily in processing by a manufacturer. The bill expands the definition of “manufacturer” by adding the word “primarily” to the exclusions of the definition of “manufacturer”, thereby allowing persons who do not primarily engage in certain activities to qualify as a “manufacturer”. DIVISION XX —— SALES AND USE TAX —— PARKING FACILITIES.2(6)(ak) specifies that the services provided by a privately owned, for-profit parking facility are subject to the sales and use tax. Currently, the services provided by any parking facility are subject to the sales and use tax. DIVISION XXI —— SALES AND USE TAX EXEMPTIONS —— MEDICAID.2(7). DIVISION XXII —— BROADCASTERS —— APPORTIONMENT OF GROSS RECEIPTS. The amendment to 2015 Iowa Acts, chapter 86, section 3, extends the retroactive applicability of the apportionment of the gross receipts of a broadcaster enacted during the 2015 legislative session in Senate File 479, from January 1, 2015, to January 1, 2013.