Senate Study Bill 3179 - Introduced
SENATE/HOUSE FILE _____
BY (PROPOSED DEPARTMENT OF
REVENUE BILL)
A BILL FOR
1 An Act relating to the duties and responsibilities of the
2 department of revenue including confidentiality of records,
3 sports wagering, the lottery, cigarette and tobacco
4 taxes, alcoholic beverages, and including effective date
5 provisions.
6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
TLSB 5330XD (13) 90
jm/jh
 S.F. _____ H.F. _____
1 DIVISION I
2 CONFIDENTIALITY OF RECORDS
3 Section 1. Section 422.29, Code 2024, is amended by adding
4 the following new subsection:
5 NEW SUBSECTION. 4. Notwithstanding sections 422.20 and
6 422.72 or any other provision of law to the contrary, the
7 department may submit to the court the entire record under seal
8 for the purpose of judicial review under section 17A.19. The
9 record in the custody of the department remains open to public
10 inspection to the extent allowed by chapters 17A and 22, and
11 sections 422.20, subsection 5, and 422.72, subsection 8.
12 Sec. 2. EFFECTIVE DATE. This division of this Act, being
13 deemed of immediate importance, takes effect upon enactment.
14 DIVISION II
15 SPORTS WAGERING
16 Sec. 3. Section 99F.18, Code 2024, is amended to read as
17 follows:
18 99F.18 Tax on winnings.
19 1. All winnings derived from slot machines operated
20 pursuant to this chapter are Iowa earned income and are subject
21 to state and federal income tax laws. An amount deducted from
22 winnings for payment of the state tax, pursuant to section
23 422.16, subsection 2, shall be remitted to the department of
24 revenue on behalf of the winner.
25 2. All winnings from sports wagering authorized under this
26 chapter are Iowa earned income and subject to state and federal
27 income tax laws. An amount deducted from winnings for payment
28 of state tax pursuant to section 422.16, subsection 2, shall be
29 remitted to the department of revenue on behalf of the winner.
30 Sec. 4. Section 422.16, subsection 2, paragraph d, Code
31 2024, is amended to read as follows:
32 d. For the purposes of this subsection, state income tax
33 shall be withheld on winnings in excess of six hundred dollars
34 derived from gambling activities authorized under chapter
35 99B or 99G. State income tax shall be withheld on winnings
LSB 5330XD (13) 90
-1- jm/jh 1/21
 S.F. _____ H.F. _____
1 in excess of one thousand dollars from gambling activities
2 authorized under chapter 99D. State income tax shall be
3 withheld on winnings in excess of one thousand two hundred
4 dollars derived from slot machines authorized under chapter
5 99F. State income tax shall be withheld on winnings in excess
6 of five thousand dollars from sports wagering authorized under
7 chapter 99F.
8 DIVISION III
9 LOTTERY
10 Sec. 5. Section 99G.3, Code 2024, is amended by adding the
11 following new subsections:
12 NEW SUBSECTION. 3A. “Bona fide social relationship” means
13 a real, genuine, unfeigned social relationship between two or
14 more persons, where each person has an established knowledge of
15 the other, which has not arisen for the purpose of gambling.
16 NEW SUBSECTION. 9A. “Lottery courier” means a person who
17 offers or undertakes to procure tickets or shares in lottery
18 games from a lottery retailer on behalf of another person, and
19 who does not have a bona fide social relationship with that
20 other person.
21 Sec. 6. Section 99G.24, subsection 7, Code 2024, is amended
22 by adding the following new paragraph:
23 NEW PARAGRAPH. j. The department determines, based upon
24 available information, that either the structure or activities
25 of the applicant’s business is likely to violate provisions of
26 this chapter, or any regulation, policy, or procedure of the
27 division.
28 Sec. 7. Section 99G.30, Code 2024, is amended by adding the
29 following new subsections:
30 NEW SUBSECTION. 8. A person shall not do any of the
31 following:
32 a. Act or operate as a lottery courier.
33 b. Do business with a lottery courier.
34 NEW SUBSECTION. 9. A retailer shall not sell tickets or
35 shares in a lottery game to any of the following:
LSB 5330XD (13) 90
-2- jm/jh 2/21
 S.F. _____ H.F. _____
1 a. A lottery courier.
2 b. An employee or agent of a lottery courier.
3 Sec. 8. Section 99G.31, subsection 3, paragraph g, Code
4 2024, is amended by striking the paragraph and inserting in
5 lieu thereof the following:
6 g. A ticket or share issued by the division shall not
7 be purchased by and no prize shall be paid to any of the
8 following:
9 (1) A member of the board.
10 (2) An officer or employee of the department.
11 (3) An officer or employee of the state providing services
12 to the department to administer this chapter if such officer
13 or employee has access to confidential information which may
14 compromise the integrity of the lottery.
15 (4) A spouse, child, sibling, or parent residing as a member
16 of the same household in the principal place of residence of
17 any person described in subparagraphs (1) through (3).
18 Sec. 9. Section 99G.34, Code 2024, is amended by adding the
19 following new subsection:
20 NEW SUBSECTION. 9. Ticket order history; ticket inventory;
21 or any records that if disclosed could impair or adversely
22 impact the security, integrity, or fairness of a lottery game
23 or the security of lottery retailers.
24 DIVISION IV
25 CIGARETTE AND TOBACCO TAXES AND REPORTS —— ELECTRONIC FILING
26 Sec. 10. Section 453A.1, subsection 27, Code 2024, is
27 amended to read as follows:
28 27. “State permit” shall mean and include all permits issued
29 by the department to distributors, wholesalers, and retailers
30 under this chapter except the permits issued to retailers
31 approved by cities and counties pursuant to sections 453A.13
32 and 453A.47A.
33 Sec. 11. Section 453A.6, subsection 8, paragraph a, Code
34 2024, is amended to read as follows:
35 a. Pay directly to the department, in lieu of the tax
LSB 5330XD (13) 90
-3- jm/jh 3/21
 S.F. _____ H.F. _____
1 under subsection 1, a tax equal to three and six hundredths
2 cents on each cigarette dispensed from such machine. Payments
3 made under this paragraph shall be remitted to the department
4 electronically.
5 Sec. 12. Section 453A.8, subsection 2, Code 2024, is amended
6 to read as follows:
7 2. Orders for cigarette tax stamps, including the payment
8 for such stamps, shall be sent direct made to the department
9 electronically on a form to be prescribed by the director,
10 except as provided in subsection 6.
11 Sec. 13. Section 453A.13, subsection 2, paragraph a, Code
12 2024, is amended to read as follows:
13 a. The department shall issue state permits to distributors,
14 wholesalers, and cigarette vendors, and retailers that
15 make delivery sales of alternative nicotine products and
16 vapor products, subject to the conditions provided in this
17 subchapter. If an out-of-state retailer makes delivery
18 sales of alternative nicotine products or vapor products, an
19 application shall be filed with the department electronically
20 and a permit shall be issued for the out-of-state retailer’s
21 principal place of business. Cities may issue approve retail
22 permits to retailers permit applications for applicants with
23 a place of business located within their respective limits.
24 County boards of supervisors may issue approve retail permits
25 to retailers permit applications for applicants with a place of
26 business in their respective counties, outside of the corporate
27 limits of cities. Upon approval of a retail permit application
28 by a city or county, the department shall issue the permit to
29 the applicant on behalf of the city or county, in the manner
30 determined by the department. A city or county shall use the
31 electronic portal of the department to process retail permit
32 applications. A city or county that is unable to use the
33 electronic portal of the department may request permission from
34 the director to process retail applications by another method.
35 Sec. 14. Section 453A.13, subsection 2, paragraph c, Code
LSB 5330XD (13) 90
-4- jm/jh 4/21
 S.F. _____ H.F. _____
1 2024, is amended to read as follows:
2 c. A city or county shall submit a duplicate of any
3 application for a retail permit to the department within thirty
4 days of the issuance. The department shall submit the current
5 list of all retail permits issued to the department of health
6 and human services by the last day of each quarter of a state
7 fiscal year.
8 Sec. 15. Section 453A.13, subsection 3, paragraph a, Code
9 2024, is amended to read as follows:
10 a. All permits provided for in this subchapter shall expire
11 on June 30 of each year. A permit shall not be granted or
12 issued until the applicant has paid the fees to the department
13 required in this subchapter for the next period ending on June
14 30 next, to the department or the city or county granting the
15 permit, the fees provided for in this subchapter. The annual
16 state permit fee for a distributor, cigarette vendor, and
17 wholesaler is one hundred dollars when the permit is granted
18 during the months of July, August, or September. However,
19 whenever a state permit holder operates more than one place of
20 business, a duplicate state permit shall be issued for each
21 additional place of business on payment of five dollars for
22 each duplicate state permit, but refunds as provided in this
23 subchapter do not apply to any duplicate permit issued.
24 Sec. 16. Section 453A.13, subsection 5, unnumbered
25 paragraph 1, Code 2024, is amended to read as follows:
26 Permits shall be issued only upon applications accompanied
27 by the fee indicated above, and by an adequate bond as provided
28 in section 453A.14, and upon forms furnished by the department
29 upon written request. The failure to furnish such forms shall
30 be no excuse for the failure to file the forms unless absolute
31 refusal is shown. Applications, any supporting documentation,
32 and the associated fees required by this section shall be
33 submitted to the department electronically. The forms shall
34 set forth all of the following:
35 Sec. 17. Section 453A.13, subsection 9, unnumbered
LSB 5330XD (13) 90
-5- jm/jh 5/21
 S.F. _____ H.F. _____
1 paragraph 1, Code 2024, is amended to read as follows:
2 Each permit issued shall describe clearly the place of
3 business for which it is issued, shall be nonassignable,
4 consecutively numbered, designating the kind of permit, and
5 shall authorize the sale of cigarettes, alternative nicotine
6 products, or vapor products in this state subject to the
7 limitations and restrictions herein contained. The retail
8 permits shall be upon forms furnished by the department or on
9 forms made available or approved by the department.
10 Sec. 18. Section 453A.14, subsection 1, unnumbered
11 paragraph 1, Code 2024, is amended to read as follows:
12 No A state or manufacturer’s permit shall not be issued until
13 the applicant files a bond, with good and sufficient surety,
14 to be approved by the director, which bond shall be in favor of
15 the state and conditioned upon the payment of taxes, damages,
16 fines, penalties, and costs adjudged against the permit holder
17 for violation of any of the provisions of this subchapter. The
18 bonds shall be on forms prescribed by the director and shall be
19 filed electronically. A bond filed under this section shall be
20 in one of the following amounts:
21 Sec. 19. Section 453A.14, subsection 2, Code 2024, is
22 amended to read as follows:
23 2. A person shall not engage in interstate business unless
24 the person files a bond, with good and sufficient surety in an
25 amount of not less than one thousand dollars. A bond required
26 by this subsection shall be on forms prescribed by the director
27 and shall be filed electronically. The amount of the bond
28 required of the person shall be fixed by the director, subject
29 to the minimum limitation provided in this section. The bond
30 is subject to approval by the director and shall be payable to
31 the state in Des Moines, Polk county, and conditioned upon the
32 payment of taxes, damages, fines, penalties, and costs adjudged
33 against the person for violation of any of the requirements of
34 this subchapter affecting the person, on a form prescribed by
35 the director.
LSB 5330XD (13) 90
-6- jm/jh 6/21
 S.F. _____ H.F. _____
1 Sec. 20. Section 453A.15, subsection 7, Code 2024, is
2 amended to read as follows:
3 7. The director may require by rule that Any reports
4 required to be made under this subchapter shall be filed by
5 electronic transmission electronically.
6 Sec. 21. Section 453A.16, Code 2024, is amended to read as
7 follows:
8 453A.16 Manufacturer’s permit.
9 The department may, upon application of any manufacturer,
10 issue without charge to the manufacturer a manufacturer’s
11 permit. The application shall contain information as
12 the director shall prescribe and the application shall be
13 submitted to the department electronically. The holder of a
14 manufacturer’s permit is authorized to purchase stamps from
15 the department, and must affix stamps to individual packages
16 of cigarettes outside of this state, prior to their shipment
17 into the state unless the cigarettes are shipped to an Iowa
18 permitted distributor or an Iowa permitted distributor’s agent.
19 Sec. 22. Section 453A.17, subsection 1, Code 2024, is
20 amended to read as follows:
21 1. Every distributing agent in the state, now engaged,
22 or who desires to become engaged, in the business of storing
23 unstamped cigarettes which are received in interstate commerce
24 for distribution or delivery only upon order received from
25 without the state or to be sold outside the state, shall
26 file with the department electronically, an application for
27 a distributing agent’s permit, on a form prescribed by the
28 director, to be furnished upon written request. The failure
29 to furnish shall be no excuse for the failure to file the same
30 unless an absolute refusal is shown. Said form shall set
31 forth the name under which such distributing agent transacts
32 or intends to transact such business as a distributing agent,
33 the principal office and place of business in Iowa to which
34 the permit is to apply, and if other than an individual, the
35 principal officers or members thereof and their addresses. The
LSB 5330XD (13) 90
-7- jm/jh 7/21
 S.F. _____ H.F. _____
1 director may require any other information in said application.
2 No distributing agent shall engage in such business until
3 such application has been filed and fee in the sum of one
4 hundred dollars paid for the permit and until the permit has
5 been obtained. Such permit shall expire on June 30 following
6 the date of issuance. All of the provisions of the last
7 two paragraphs of section 453A.14, relative to bonds, are
8 incorporated herein and by this reference made applicable to
9 distributing agents. Upon failure to furnish adequate bond
10 as required, the permit shall be revoked without hearing. An
11 application shall be filed and a permit obtained for each place
12 of business owned or operated by a distributing agent.
13 Sec. 23. Section 453A.18, Code 2024, is amended to read as
14 follows:
15 453A.18 Forms for records and reports.
16 The department shall furnish or make available in electronic
17 form, without charge, to holders of the various permits, forms
18 in sufficient quantities to enable permit holders to make the
19 reports required to be made under this subchapter. The permit
20 holders shall furnish at their own expense the books, records,
21 and invoices, required to be used and kept, but the books,
22 records, and invoices shall be in exact conformity to the forms
23 prescribed for that purpose by the director, and shall be kept
24 and used in the manner prescribed by the director. However,
25 the director may, by express order in certain cases, authorize
26 permit holders to keep their records in a manner and upon forms