Proyectos de ley › 89.ª Asamblea General
HSB 552
Dónde está ahora
- Hecho: Presentado19 de enero de 2022
- Hecho: Subcomité19 de enero de 2022
- Hecho: Comité de la Cámara30 de marzo de 2022
- Se saltó: Lo aprueba la CámaraSigue como HF 2583
- Se saltó: Comité del Senado
- Hecho: Lo aprueba el Senado30 de marzo de 2022
- Sigue: A gobernador(a)
- Sigue: Firmado como ley
Ahora es HF 2583 → Sigue avanzando con el número nuevo. Ir a HF 2583 ¿Qué es el embudo (funnel)?
Qué contiene
Resumen con IA People who collect sales and use taxes can now use one permit and one combined return instead of two separate ones. Most taxpayers will switch from filing their tax returns every three months to filing them every month, though those collecting very little tax can still file once a year. Local governments and school districts will receive the actual amount of certain sales taxes collected rather than just an estimate. Additionally, the bill changes how some businesses apply for tax refunds and updates the rules for reporting motor fuel sales. (Todavía no está traducido al español.)1
Lea la explicación oficial (en inglés)
_____ liability of sellers, tax refund and tax credit incentives, and motor fuel tax reporting and terminology modifications. DIVISION I —— SALES, USE, AND EXCISE TAX —— RETURNS DUE. The bill allows a taxpayer to have a combined sales and use tax permit and to file a combined return for sales and use taxes. Currently, a taxpayer must possess a separate sales and use tax permit and file separate sales and use tax returns. The bill changes numerous references to the phrase “sales tax permit” in the Code to the phrase “sales or use tax permit”. Currently, a person is required to file a sales or use tax return on a quarterly basis. The bill changes this filing requirement from a quarterly basis to a monthly basis. The bill does allow a person required to file a sales or use tax return and who collects less than $1,200 in sales or use tax in a calendar year, to file a return once a year on or before the last day of the month following the close of the calendar year.1(48)(a)(1), to be issued only one sales or use tax permit. The bill allows the director of revenue, if necessary, to ensure the payment of sales or use tax, to require a sales or use tax return be filed on a different basis other than on a monthly basis. The bill strikes a provision allowing a person required to file a sales or use tax return to take a credit against the total quarterly amount of tax due, upon a proper showing of necessity, allowing for the balance of tax due to be paid up to days after the return was due. The bill strikes a provision requiring a seller, who collects more than $30,000 of sales or use tax in the preceding calendar year, to make additional remittances to the state under the rules adopted by the director of revenue. _____ AND SCHOOL DISTRICTS. Currently, by August 15, the department of revenue estimates the local option sale tax (LOST) and securing an advanced vision for education (SAVE) tax amounts that will be transferred to each local government or school district on a fiscal year and monthly basis. The transfer estimates may be revised for the year and remaining months by the director of revenue if the estimates are incorrect. Commencing with the fiscal year beginning July 1, 2022, the bill changes the LOST and SAVE transfer amount procedures, by requiring the department of revenue to transfer the actual LOST and SAVE taxes collected that are attributable to each local government or school district to that local government or school district. The bill also creates a transition procedure for the LOST and SAVE tax amounts transferred during July and August 2022. Under the transition procedure, the department of revenue shall transfer estimated amounts of LOST and SAVE to each local government or school district for the months of July, August, and September 2022. However, beginning with the October 2022 transfer, the department of revenue shall transfer the actual amount of tax attributable to each local government or school district for the LOST and SAVE tax remitted in September 2022. The bill requires any adjustment amount that is necessary to the July, August, or September 2022 estimated transfer amounts be made by the close of business on December 30, 2022. DIVISION III —— LIABILITY OF SELLERS USING CERTIFIED SERVICE PROVIDER. The bill specifies that a seller of personal property or services who contracts with a certified service provider is not liable to the state for sales or use tax due on transactions processed by the certified service provider unless the certified service provider establishes it is not liable in accordance with the agreement with the seller. The bill specifies that if the certified service provider is liable for the sales or use tax due, the seller is not subject to audit on transactions processed by the certified service provider.1 to mean an agent certified under the agreement to perform all of a seller’s sales or use tax functions, other than the seller’s obligation to remit tax on its own purchases. DIVISION IV —— AUTHORITY TO CANCEL VARIOUS PERMITS ISSUED BY THE DEPARTMENT. The bill allows the director of the department of revenue to cancel the following tax permits if the department determines the permits are no longer in use: income tax withholding, sales or use tax, or motor fuel tax. DIVISION V —— ECONOMIC DEVELOPMENT AUTHORITY SALES AND USE TAX REFUND INCENTIVES.331A administered by the department of economic development authority, an eligible business must apply for a sales or use tax refund for items purchased prior to the “project” completion date. The bill changes the refund procedures by requiring an eligible business to apply for such sales or use tax refunds for items purchased prior to the completion of the “contract” rather than completion of the “project”. The bill also requires such an application be made within one year of the project completion date, and that the department of revenue be informed in writing after the contract completion. The bill defines “contract completion” as the date of completion of a written contract relating to the construction or equipping of the facility that is part of the project of the eligible business.331A. The bill also provides that the eligible business shall make an application to the department of revenue within one year of the project completion date, and that the department be informed in writing after the contract completion. _____ claim, prior to issuing a third-party developer tax credit certificate.355. The bill permits a housing business to claim a refund of the sales and use taxes paid prior to the completion of the housing project that are directly related to the housing project and specified in an agreement. In order to receive the sales and use tax refund, the bill requires a contractor or subcontractor working on the housing project to submit a form under oath stating the amount of sales and use taxes paid prior to the housing project. The bill makes it a simple misdemeanor if a contractor or subcontractor willfully makes a false claim under oath in relating to the workforce sales and use tax refund. The bill then requires, after the agreement completion date, the housing business to make an application to the department of revenue for any sales and use tax refund. The bill defines “agreement completion date” to mean the date the economic development authority notifies the department of revenue that all applicable requirements of the agreement have been met. The bill also requires the department of revenue to audit the claim prior to issuing the sales and use tax refund. This division takes effect upon enactment and applies to claims for refunds filed on or after the effective date of the bill. DIVISION VI —— MOTOR FUEL REPORTING REQUIREMENT —— PENALTY.61. The bill permits the department of revenue to require a retail dealer to file such a report with the department by electronic transmission. _____ $100, for each instance a retail dealer fails to timely file a report or fails to maintain records required to file the report. DIVISION VII —— MOTOR FUEL TAX TERMINOLOGY MODIFICATIONS. The bill modifies terms in Code chapter 452A (motor fuel and special fuel taxes). The bill substitutes the term “permit” for the term “license” wherever the term “license” appears. By substituting the term “permit” for the term “license”, the bill also strikes related terms to “license” including “licensed” and “licensee” and substitutes “permitted” and “permit holder” in lieu of “licensed” and “licensee”.
Cambiado después por las enmiendas H-8382, H-8370; vea Enmiendas.
Texto completo del proyecto (en inglés) · Qué cambió antes de aprobarse2
House subcommittee
Named January 19, 2022. On February 8, 2022 it recommended passage. Vote Total: 3-0.
Three legislators hear a bill first and recommend what the committee should do; it’s the best time to weigh in. How to take part
Nota fiscal
Resumen con IA This bill makes technical changes to tax programs and adjusts sales, use, and bank franchise taxes. The changes are estimated to decrease the state's General Fund by $0.1 million in fiscal year 2023, $0.2 million in fiscal year 2024, $0.2 million in fiscal year 2025, $0.2 million in fiscal year 2026, $0.2 million in fiscal year 2027, and $0.2 million in fiscal year 2028. Additionally, the bill reduces the bank franchise tax rate, which is projected to decrease General Fund revenue by $1.9 million in fiscal year 2023, $4.2 million in fiscal year 2024, $5.5 million in fiscal year 2025, $8.4 million in fiscal year 2026, $11.4 million in fiscal year 2027, and $13.4 million in fiscal year 2028. (en inglés)3
Lea la nota fiscal (en inglés)
Description
Senate File 2367 makes technical and operational adjustments to Iowa Department of Revenue (IDR) tax programs and administrative functions. The Bill also relates to sales/use tax, bank franchise tax, and personal income tax. Provisions of the Bill have various effective dates. Table 4 at the end of this Fiscal Note summarizes the General Fund fiscal impacts of the various Bill divisions.
Background — Divisions with Minimal or No Projected Fiscal Impact
- Division III — Distributions of revenue to local governments and school districts.
- Division IV — Liability of sellers using certified service provider.
- Division V — IDR authority to cancel various permits issued by the Department.
- Division VI — Iowa Economic Development Authority (IEDA) sales/use tax refund incentives.
- Division IX — Motor fuel reporting requirement penalty.
Division I — Sales, Use, and Excise Tax — Returns Due
Description and Background
The Bill provides for administrative changes, technical updates, and other changes affecting the tax code and program administration. The Bill also exempts from sales tax the purchase of specified digital products (SDP), prewritten computer software, and related services sold to public utilities.
Assumptions/Fiscal Impact (Division I)
- The IDR estimates that sales/use tax revenue will increase 3.6% in FY 2023, 3.0% in FY 2024, 2.7% in FY 2025, 2.6% in FY 2026, 3.0% in FY 2027, and 3.0% in FY 2028. Those IDR estimates are used for fiscal impact calculations. The changes to items added to the sales tax base and the removal of exemptions are shown in Table 1 and include impacts to the Secure an Advanced Vision for Education (SAVE) Fund distributions.
- The change to the exemption will decrease Local Option Sales Tax (LOST) revenue by a minimal amount.
Division II — Sales and Use Tax Exemptions
Description and Background
The Bill makes the following changes to the sales tax base. All changes are effective January 1, 2023, except for the removal of exemption for computers and peripherals, which is effective January 1, 2024.
- Eliminates the sales/use tax exemption on the sales price from the sale or rental of computers or computer peripherals by an insurance company, financial institution, or commercial enterprise.
- Exempts from sales tax the purchase of SDP, prewritten computer software, and related services sold to public utilities.
- Exempts from the sales tax the sale of feminine hygiene products.
- Exempts from sales tax the sale of child and adult diapers.
Assumptions/Fiscal Impact (Division II)
- The IDR estimates that sales/use tax revenue will increase 3.6% in FY 2023, 3.0% in FY 2024, 2.7% in FY 2025, 2.6% in FY 2026, 3.0% in FY 2027, and 3.0% in FY 2028. Those Department estimates are used for fiscal impact calculations. The changes to items added to the sales tax base and the removal of exemptions are shown in Table 2 and include impacts to the SAVE Fund distributions.Total Projected Change to
Gross Sales/Use Tax Collected
Change in
SAVE Transfers
Net General
Fund Impact
FY 2023 -0.1$ 0.0$ -0.1$ FY 2024 -0.2 0.0 -0.2 FY 2025 -0.2 0.0 -0.2 FY 2026 -0.2 0.0 -0.2 FY 2027 -0.3 -0.1 -0.2 FY 2028 -0.3 -0.1 -0.2 The FY 2023 amount is for one half of the fiscal year.
Table 1 — Fiscal Impact of Exemption for Purchase of Digital
Goods for Public Utilities
In MillionsRemoval of Exemption for
Computers and
Peripherals
Exemption for
Purchase of Feminine
Hygiene Products
Exemption for
Purchase of Adult
& Child Diapers
Total Projected Change
to Gross Sales/Use Tax
Collected
Change in
SAVE Transfers
Net General
Fund Impact
FY 2023 0.0$ -1.0$ -4.7$ -5.7$ -1.0$ -4.7$ FY 2024 34.9 -2.0 -9.5 23.4 3.9 19.5 FY 2025 71.6 -2.0 -9.7 59.9 10.0 49.9 FY 2026 72.2 -2.1 -9.9 60.2 10.0 50.2 FY 2027 69.7 -2.1 -10.1 57.5 9.6 47.9 FY 2028 66.2 -2.1 -10.3 53.8 9.0 44.8 The FY 2023 amount is for one half of the fiscal year.
In Millions
Table 2 — Increase in Sales/Use Tax Collected
- The changes to exemptions will impact LOST revenue by the following amounts:
- FY 2023 — Decrease $0.9 million (for one half of the fiscal year)
- FY 2024 — Increase $3.8 million
- FY 2025 — Increase $9.7 million
- FY 2026 — Increase $9.7 million
- FY 2027 — Increase $9.3 million
- FY 2028 — Increase $8.7 million
Division VII — Bank Franchise Tax
Description and Background
The Bill reduces Iowa’s current bank franchise tax rate of 5.0% of net income over five tax years. The tax rate is first reduced to 4.7% for tax year (TY) 2023 and is reduced over the next four years until the rate is fixed at 3.5% for TY 2027 and after.
The Iowa franchise tax applies to the net income of financial institutions that is apportioned to Iowa. The term “financial institution” refers to banks but also includes several other corporate structures. The term does not include credit unions.
The fiscal impact for a change in the franchise tax consists of two parts:
- Calculating the reduction in the franchise tax.
- Calculating the reduction in the use of the individual income tax Bank Franchise Tax Credit that is the result of a decrease in the franchise tax rate. The Bank Franchise Tax Credit is a mechanism used to avoid the double taxation of financial institution profits. Double taxation occurs if the profits of an institution are taxed first at the entity (corporate) level, and the owners are then taxed on the profits as income. The credit adjusts an owner’s income to account for the fact that franchise tax was paid on the profits at the entity level. The Bank Franchise Tax Credit is a nonrefundable credit.
Assumptions/Fiscal Impact (Division VII) The IDR uses a bank profit projection process for the franchise tax projection that:
- Begins with a projection of net income at the entity (national) level using data from returns filed for tax years 2018 through 2020.
- Apportions each entity’s net income to Iowa.
- Applies the current 5.0% tax rate and the proposed tax rate reductions.
- Subtracts tax credits.
- Compares the projected tax liability results using the current tax rate to the results using the proposed tax rates.
- Applies the projected reduction percentages to current law projections for gross franchise tax collections based on the most recent Revenue Estimating Conference projections for FY 2023 and the IDR’s projections for future years.
Based on 2007 through 2021 historical averages of franchise tax payments and Bank Franchise Tax Credits, the IDR estimates that for each $1.00 of reduced franchise tax, the corresponding reduction in Bank Franchise Tax Credit usage on Iowa individual income tax returns will increase individual income tax by $0.35.
The franchise tax rate reductions are projected to reduce bank franchise tax liability and decrease the use of the Bank Franchise Tax Credit. The annual amounts of the two fiscal impacts combine to produce the following projected net tax liability and State General Fund revenue reductions:
- FY 2023 — $1.9 million
- FY 2024 — $4.2 million
- FY 2025 — $5.5 million
- FY 2026 — $8.4 million
- FY 2027 — $11.4 million
- FY 2028 — $13.4 million
For years beyond FY 2028, the projected tax liability and State General Fund revenue reductions are expected to increase at the rate of net income growth for banks doing business in Iowa.
Division VIII — Manufactured Food — Sales Tax Exemption
Description and Background
The Bill expands the exemption of items and services used by a manufacturer to produce marketable food products for human consumption to include an exemption for a manufacturer of food ingredients. The change is effective upon enactment and applies retroactively to January 1, 2019. Due to the retroactive applicability, the Bill requires refund claims to be filed prior to October 1, 2022, and total refund claims cannot exceed $100,000 for any calendar year. Iowa Code section 423.3(49) provides an exemption for items or services purchased in the production of food. Those items and services are considered taxable if used in the production of food ingredients or other products that could be eaten as food but are not marketable food products for human consumption.
Items, services, equipment, materials, and facilities used in the production of food are often the same as those used in the production of food ingredients or other food products that are not marketable for human consumption. It can be difficult to distinguish an item or service that is used in the production of food products for human consumption from one that is used for some other purpose, which can complicate compliance with the provisions of current law. The difficulty to distinguish has been the source of a number of tax appeals in recent years. Assumptions/Fiscal Impact (Division VIII)
- The cost of items and services associated with the manufacture of both food and food ingredients is estimated to have been $445.1 million in 2020, and 80.0% of these costs will fall under the new exemption. Because of current noncompliance, the fiscal impact of the change will be 20.0% of the expanded exemption.
- Growth trend projections for future fiscal years are based on the consumer price index (CPI) and will increase 5.0% in 2021 and 2.0% annually thereafter through 2028.
- SAVE refunds are 1.0% of sales/use tax collected. LOST distributions are estimated to be 0.97% of sales/use tax collected.
- The full $100,000 of refund claims per year, starting with FY 2019 and continuing through FY 2022, will be utilized, increasing the FY 2023 fiscal impact estimate by $400,000 to account for four years of refund claims being filed.
The tax decrease associated with the expanded exemption is shown in Table 3 and includes impacts to the SAVE Fund distributions.
The changes to exemptions will decrease LOST revenue by the following amounts:
- FY 2023 — $0.8 million
- FY 2024 — $0.8 million
- FY 2025 — $0.8 million
- FY 2026 — $0.8 million
- FY 2027 — $0.8 million
- FY 2028 — $0.8 million
Division X — Solar Energy System Tax Credit
Description and Background
The Bill allows taxpayers with residential solar energy system installations that were completed during calendar year (CY) 2021 or are on the wait list to receive the Solar Energy System Tax Credit. The Bill makes inapplicable the current May 1, 2022, deadline for credit applications to be filed for CY 2021 installations and instead requires application by June 30, 2022. The residential installations that are approved for the tax credit under the provisions of the Bill are not to be counted as part of the annual $5.0 million aggregate tax credit cap for all solar energy system installations. The changes are effective upon enactment and apply retroactively to tax year 2022.
The Solar Energy System Tax Credit has been available since January 1, 2012. The Iowa tax credit is equal to a percentage of the federal tax credit that was available for the same purpose. For installations completed on or after January 1, 2016, the Iowa credit is equal to the 50.0% of the federal credit.
The federal tax credit ended for residential installations completed after December 31, 2021. Iowa law limits the total aggregate amount of tax credits approved under the program in a calendar year to $5.0 million. The full CY 2021 allocation has been awarded, and a wait list exists for projects that qualify for the credit but will not receive an award under current law because of the annual cap.
The tax credits are not transferable or refundable, but unused tax credits may carry forward for up to 10 fiscal years.Total Projected Change to Gross
Sales/Use Tax Collected
Change in SAVE
Transfers
Net General
Fund Impact
FY 2023 -5.0$ -0.8$ -4.2$ FY 2024 -4.7 -0.8 -3.9 FY 2025 -4.8 -0.8 -4.0 FY 2026 -4.9 -0.8 -4.1 FY 2027 -5.0 -0.8 -4.2 FY 2028 -5.1 -0.9 -4.2 The FY 2023 amount includes $400,000 for refund claims being filed.
Table 3 — Fiscal Impact of Exemption for Manufacturers of Food
Ingredients
In Millions
Assumptions/Fiscal Impact (Division X) Based on tax credit applications from residential projects completed during CY 2018 through CY 2020, the IDR estimates that a total of $5.6 million in applications will be approved under the provisions of the Bill.
The Legislative Services Agency estimates that awarded tax credits will be redeemed over eight fiscal years as follows:
- FY 2023 — 45.0%
- FY 2024 — 20.0%
- FY 2025 — 10.0%
- FY 2026 through FY 2030 — 5.0% each fiscal year
The redemption of Solar Energy System Tax Credits that are assumed to be issued under the provisions of the Bill are projected to reduce individual income tax liability and General Fund revenue by the following amounts:
- FY 2023 — $2.5 million
- FY 2024 — $1.1 million
- FY 2025 — $0.5 million
- FY 2026 through FY 2030 — $0.3 million each fiscal year
There is no projected fiscal impact beyond FY 2030.
Division XI — Individual Income Tax Exclusion — Certain Premium Pay and Bonuses
Description and Background
The Bill provides for State individual income tax exemptions for bonus payments specified in the Bill. The State individual income tax exemption applies retroactively to tax years beginning on or after January 1, 2022, but before January 1, 2023.
Fiscal Impact (Division XI) The fiscal impact is estimated to be a General Fund reduction of $2.8 million in FY 2023 compared to what would have been collected if the identified bonuses would have been subject to State individual income tax.
Summary of Fiscal Impact
State General Fund — Table 4 summarizes the Bill’s projected General Fund fiscal impacts.
Sources
- Department of Revenue
- LSA calculations
- Final Fiscal Note — Department of Revenue, Sales Tax · 25 de mayo de 2022
- Department of Revenue, Sales Tax · 8 de abril de 2022
Lo que cambia del Código de Iowa (Iowa Code)
Modifica§15.331A§15.331C§15.355§312.1§321.105A§421.17§421.26§423.14§423.14A§423.3§423.31§423.33§423.34§423.36§423.40§423.45§423.48§423.5§423.50§423.57§423.58§423A.6§423B.5§423B.6§423B.7§423C.4§423D.4§423F.2§423G.5§452A.12§452A.15§452A.2§452A.21§452A.22§452A.3§452A.33§452A.4§452A.52§452A.53§452A.54y 20 más
Deroga§423.32
Cita§423.2
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89th General Assembly