Senate File 504 - Introduced
SENATE FILE
BY COMMITTEE ON WAYS AND
MEANS
(SUCCESSOR TO SSB
1272)
A BILL FOR
1 An Act relating to revenue and taxation by increasing the sales
2 and use tax rates, establishing transfers to the natural
3 resources and outdoor recreation trust fund, and including
4 effective date provisions.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 Section 1. Section 423.2, subsection 1, unnumbered
1 2 paragraph 1, Code 2015, is amended to read as follows:
1 3 There is imposed a tax of six and three=eighths percent upon
1 4 the sales price of all sales of tangible personal property,
1 5 consisting of goods, wares, or merchandise, sold at retail in
1 6 the state to consumers or users except as otherwise provided
1 7 in this subchapter.
1 8 Sec. 2. Section 423.2, subsections 2 and 3, Code 2015, are
1 9 amended to read as follows:
1 10 2. A tax of six and three=eighths percent is imposed upon
1 11 the sales price of the sale or furnishing of gas, electricity,
1 12 water, heat, pay television service, and communication service,
1 13 including the sales price from such sales by any municipal
1 14 corporation or joint water utility furnishing gas, electricity,
1 15 water, heat, pay television service, and communication service
1 16 to the public in its proprietary capacity, except as otherwise
1 17 provided in this subchapter, when sold at retail in the state
1 18 to consumers or users.
1 19 3. A tax of six and three=eighths percent is imposed upon
1 20 the sales price of all sales of tickets or admissions to places
1 21 of amusement, fairs, and athletic events except those of
1 22 elementary and secondary educational institutions. A tax of
1 23 six and three=eighths percent is imposed on the sales price of
1 24 an entry fee or like charge imposed solely for the privilege of
1 25 participating in an activity at a place of amusement, fair, or
1 26 athletic event unless the sales price of tickets or admissions
1 27 charges for observing the same activity are taxable under this
1 28 subchapter. A tax of six and three=eighths percent is imposed
1 29 upon that part of private club membership fees or charges paid
1 30 for the privilege of participating in any athletic sports
1 31 provided club members.
1 32 Sec. 3. Section 423.2, subsection 4, paragraph a, Code 2015,
1 33 is amended to read as follows:
1 34 a. A tax of six and three=eighths percent is imposed upon
1 35 the sales price derived from the operation of all forms of
2 1 amusement devices and games of skill, games of chance, raffles,
2 2 and bingo games as defined in chapter 99B, and card game
2 3 tournaments conducted under section 99B.7B, that are operated
2 4 or conducted within the state, the tax to be collected from
2 5 the operator in the same manner as for the collection of taxes
2 6 upon the sales price of tickets or admission as provided in
2 7 this section. Nothing in this subsection shall legalize any
2 8 games of skill or chance or slot=operated devices which are now
2 9 prohibited by law.
2 10 Sec. 4. Section 423.2, subsection 5, Code 2015, is amended
2 11 to read as follows:
2 12 5. There is imposed a tax of six and three=eighths percent
2 13 upon the sales price from the furnishing of services as defined
2 14 in section 423.1.
2 15 Sec. 5. Section 423.2, subsection 7, paragraph a,
2 16 unnumbered paragraph 1, Code 2015, is amended to read as
2 17 follows:
2 18 A tax of six and three=eighths percent is imposed upon the
2 19 sales price from the sales, furnishing, or service of solid
2 20 waste collection and disposal service.
2 21 Sec. 6. Section 423.2, subsection 8, paragraph a, Code 2015,
2 22 is amended to read as follows:
2 23 a. A tax of six and three=eighths percent is imposed on
2 24 the sales price from sales of bundled transactions. For the
2 25 purposes of this subsection, a "bundled transaction" is the
2 26 retail sale of two or more distinct and identifiable products,
2 27 except real property and services to real property, which
2 28 are sold for one nonitemized price. A "bundled transaction"
2 29 does not include the sale of any products in which the sales
2 30 price varies, or is negotiable, based on the selection by the
2 31 purchaser of the products included in the transaction.
2 32 Sec. 7. Section 423.2, subsection 9, Code 2015, is amended
2 33 to read as follows:
2 34 9. A tax of six and three=eighths percent is imposed upon
2 35 the sales price from any mobile telecommunications service,
3 1 including all paging services, that this state is allowed
3 2 to tax pursuant to the provisions of the federal Mobile
3 3 Telecommunications Sourcing Act, Pub. L. No. 106=252, 4 U.S.C.
3 4 {116 et seq. For purposes of this subsection, taxes on mobile
3 5 telecommunications service, as defined under the federal Mobile
3 6 Telecommunications Sourcing Act that are deemed to be provided
3 7 by the customer's home service provider, shall be paid to
3 8 the taxing jurisdiction whose territorial limits encompass
3 9 the customer's place of primary use, regardless of where the
3 10 mobile telecommunications service originates, terminates,
3 11 or passes through and shall in all other respects be taxed
3 12 in conformity with the federal Mobile Telecommunications
3 13 Sourcing Act. All other provisions of the federal Mobile
3 14 Telecommunications Sourcing Act are adopted by the state of
3 15 Iowa and incorporated into this subsection by reference. With
3 16 respect to mobile telecommunications service under the federal
3 17 Mobile Telecommunications Sourcing Act, the director shall, if
3 18 requested, enter into agreements consistent with the provisions
3 19 of the federal Act.
3 20 Sec. 8. Section 423.2, subsection 11, paragraph b,
3 21 subparagraph (2), Code 2015, is amended to read as follows:
3 22 (2) Transfer from the remaining revenues the amounts
3 23 required under Article VII, section 10, of the Constitution
3 24 of the State of Iowa to the natural resources and outdoor
3 25 recreation trust fund created in section 461.31, if applicable.
3 26 Sec. 9. Section 423.2, subsection 13, Code 2015, is amended
3 27 to read as follows:
3 28 13. The sales tax rate of six and three=eighths percent is
3 29 reduced to five and three=eighths percent on January 1, 2030.
3 30 Sec. 10. Section 423.5, subsection 1, unnumbered paragraph
3 31 1, Code 2015, is amended to read as follows:
3 32 Except as provided in paragraph "c", an excise tax at the
3 33 rate of six and three=eighths percent of the purchase price or
3 34 installed purchase price is imposed on the following:
3 35 Sec. 11. Section 423.5, subsection 5, Code 2015, is amended
4 1 to read as follows:
4 2 5. The use tax rate of six and three=eighths percent is
4 3 reduced to five and three=eighths percent on January 1, 2030.
4 4 Sec. 12. Section 423.43, subsection 1, paragraph b, Code
4 5 2015, is amended to read as follows:
4 6 b. Subsequent to the deposit into the general fund of the
4 7 state and after the transfer of such pursuant to paragraph "a",
4 8 the department shall do the following in the order prescribed:
4 9 (1) Transfer the revenues collected under chapter 423B, the
4 10 department shall transfer one=sixth.
4 11 (2) Transfer fifteen and six thousand eight hundred
4 12 sixty=three ten=thousandths percent of such remaining revenues
4 13 to the secure an advanced vision for education fund created in
4 14 section 423F.2. This paragraph subparagraph (2) is repealed
4 15 December 31, 2029.
4 16 Sec. 13. PURPOSE. The purpose of this Act is to provide
4 17 for the implementation of Article VII, section 10, of the
4 18 Constitution of the State of Iowa by fully funding the natural
4 19 resources and outdoor recreation trust fund as created in
4 20 section 461.31, pursuant to Article VII, section 10, of the
4 21 Constitution of the State of Iowa.
4 22 Sec. 14. EFFECTIVE DATE. This Act takes effect on July 1,
4 23 2016.
4 24 EXPLANATION
4 25 The inclusion of this explanation does not constitute agreement with
4 26 the explanation's substance by the members of the general assembly.
4 27 This bill relates to state sales and use taxes and to an
4 28 amendment to the Iowa Constitution ratified on November 2,
4 29 2010, which created a natural resources and outdoor recreation
4 30 trust fund (fund) and dedicated a portion of state revenues to
4 31 the fund for the purposes of protecting and enhancing water
4 32 quality and natural areas in the state including parks, trails,
4 33 and fish and wildlife habitat, and conserving agricultural
4 34 soils in the state (Article VII, section 10). The fund is
4 35 codified in Code section 461.31. Pursuant to the amendment,
5 1 the amount credited to the fund will be equal to the amount
5 2 generated by an increase in the state sales tax rate occurring
5 3 after the effective date of the constitutional amendment, but
5 4 shall not exceed the amount that a state sales tax rate of
5 5 0.375 percent would generate. The state sales tax rate has not
5 6 been increased since the effective date of the constitutional
5 7 amendment, so no amounts have been credited to the fund. The
5 8 bill increases from 6 percent to 6.375 percent the state
5 9 sales tax rate and the state use tax rate, and provides for
5 10 the transfer of sales tax revenues to the fund. The bill
5 11 also amends the transfer of use tax revenues to the secure
5 12 an advanced vision for education fund (SAVE) in Code section
5 13 423F.2 from 1/6th (approximately 16.66 percent) of the revenues
5 14 to 15.6863 percent of the revenues to ensure that SAVE receives
5 15 approximately the same proportion of the total use tax revenue
5 16 as it did prior to the use tax rate increase provided in the
5 17 bill.
5 18 The bill takes effect July 1, 2016.
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