Senate File 2427 - Reprinted
SENATE FILE 2427
BY COMMITTEE ON WAYS AND MEANS
(SUCCESSOR TO SSB 3179)
(As Amended and Passed by the Senate April 15, 2024)
A BILL FOR
1 An Act relating to the duties and responsibilities of the
2 department of revenue including sports wagering, the
3 lottery, cigarette and tobacco taxes, alcoholic beverages,
4 and including effective date provisions.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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1 DIVISION I
2 SPORTS WAGERING
3 Section 1. Section 99F.18, Code 2024, is amended to read as
4 follows:
5 99F.18 Tax on winnings.
6 1. All winnings derived from slot machines operated
7 pursuant to this chapter are Iowa earned income and are subject
8 to state and federal income tax laws. An amount deducted from
9 winnings for payment of the state tax, pursuant to section
10 422.16, subsection 2, shall be remitted to the department of
11 revenue on behalf of the winner.
12 2. All winnings from sports wagering authorized under this
13 chapter are Iowa earned income and subject to state and federal
14 income tax laws. An amount deducted from winnings for payment
15 of state tax pursuant to section 422.16, subsection 2, shall be
16 remitted to the department of revenue on behalf of the winner.
17 Sec. 2. Section 422.16, subsection 2, paragraph d, Code
18 2024, is amended to read as follows:
19 d. For the purposes of this subsection, state income tax
20 shall be withheld on winnings in excess of six hundred dollars
21 derived from gambling activities authorized under chapter
22 99B or 99G. State income tax shall be withheld on winnings
23 in excess of one thousand dollars from gambling activities
24 authorized under chapter 99D. State income tax shall be
25 withheld on winnings in excess of one thousand two hundred
26 dollars derived from slot machines authorized under chapter
27 99F. State income tax shall be withheld on winnings from
28 sports wagering authorized under chapter 99F whenever federal
29 income tax is required to be withheld from the same winnings in
30 accordance with the Internal Revenue Code.
31 DIVISION II
32 LOTTERY
33 Sec. 3. Section 99G.3, Code 2024, is amended by adding the
34 following new subsections:
35 NEW SUBSECTION. 3A. “Bona fide social relationship” means
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1 a real, genuine, unfeigned social relationship between two or
2 more persons, where each person has an established knowledge of
3 the other, which has not arisen for the purpose of gambling.
4 NEW SUBSECTION. 9A. “Lottery courier” means a person who
5 offers or undertakes to procure tickets or shares in lottery
6 games from a lottery retailer on behalf of another person, and
7 who does not have a bona fide social relationship with that
8 other person.
9 Sec. 4. Section 99G.24, subsection 7, Code 2024, is amended
10 by adding the following new paragraph:
11 NEW PARAGRAPH. j. The department determines, based upon
12 available information, that either the structure or activities
13 of the applicant’s business is likely to violate provisions of
14 this chapter, or any regulation, policy, or procedure of the
15 division.
16 Sec. 5. Section 99G.30, Code 2024, is amended by adding the
17 following new subsections:
18 NEW SUBSECTION. 8. A person shall not do any of the
19 following:
20 a. Act or operate as a lottery courier.
21 b. Do business with a lottery courier.
22 NEW SUBSECTION. 9. A retailer shall not knowingly sell
23 tickets or shares in a lottery game to any of the following:
24 a. A lottery courier.
25 b. An employee or agent of a lottery courier.
26 Sec. 6. Section 99G.31, subsection 3, paragraph g, Code
27 2024, is amended by striking the paragraph and inserting in
28 lieu thereof the following:
29 g. A ticket or share issued by the division shall not
30 be purchased by and no prize shall be paid to any of the
31 following:
32 (1) A member of the board.
33 (2) An officer or employee of the department.
34 (3) An officer or employee of the state providing services
35 to the department to administer this chapter if such officer
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1 or employee has access to confidential information which may
2 compromise the integrity of the lottery.
3 (4) A spouse, child, sibling, or parent residing as a member
4 of the same household in the principal place of residence of
5 any person described in subparagraphs (1) through (3).
6 Sec. 7. Section 99G.34, Code 2024, is amended by adding the
7 following new subsection:
8 NEW SUBSECTION. 9. Ticket order history; ticket inventory;
9 or any records that if disclosed could impair or adversely
10 impact the security, integrity, or fairness of a lottery game
11 or the security of lottery retailers.
12 DIVISION III
13 CIGARETTE AND TOBACCO TAXES AND REPORTS —— ELECTRONIC FILING
14 Sec. 8. Section 453A.1, subsection 27, Code 2024, is amended
15 to read as follows:
16 27. “State permit” shall mean and include all permits issued
17 by the department to distributors, wholesalers, and retailers
18 under this chapter except the permits issued to retailers
19 approved by cities and counties pursuant to sections 453A.13
20 and 453A.47A.
21 Sec. 9. Section 453A.6, subsection 8, paragraph a, Code
22 2024, is amended to read as follows:
23 a. Pay directly to the department, in lieu of the tax
24 under subsection 1, a tax equal to three and six hundredths
25 cents on each cigarette dispensed from such machine. Payments
26 made under this paragraph shall be remitted to the department
27 electronically.
28 Sec. 10. Section 453A.8, subsection 2, Code 2024, is amended
29 to read as follows:
30 2. Orders for cigarette tax stamps, including the payment
31 for such stamps, shall be sent direct made to the department
32 electronically on a form to be prescribed by the director,
33 except as provided in subsection 6.
34 Sec. 11. Section 453A.13, subsection 2, paragraph a, Code
35 2024, is amended to read as follows:
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1 a. The department shall issue state permits to distributors,
2 wholesalers, and cigarette vendors, and retailers that
3 make delivery sales of alternative nicotine products and
4 vapor products, subject to the conditions provided in this
5 subchapter. If an out-of-state retailer makes delivery
6 sales of alternative nicotine products or vapor products, an
7 application shall be filed with the department electronically
8 and a permit shall be issued for the out-of-state retailer’s
9 principal place of business. Cities may issue approve retail
10 permits to retailers permit applications for applicants with
11 a place of business located within their respective limits.
12 County boards of supervisors may issue approve retail permits
13 to retailers permit applications for applicants with a place of
14 business in their respective counties, outside of the corporate
15 limits of cities. Upon approval of a retail permit application
16 by a city or county, the department shall issue the permit to
17 the applicant on behalf of the city or county, in the manner
18 determined by the department. A city or county shall use the
19 electronic portal of the department to process retail permit
20 applications. A city or county that is unable to use the
21 electronic portal of the department may request permission from
22 the director to process retail applications by another method.
23 Sec. 12. Section 453A.13, subsection 2, paragraph c, Code
24 2024, is amended to read as follows:
25 c. A city or county shall submit a duplicate of any
26 application for a retail permit to the department within thirty
27 days of the issuance. The department shall submit the current
28 list of all retail permits issued to the department of health
29 and human services by the last day of each quarter of a state
30 fiscal year.
31 Sec. 13. Section 453A.13, subsection 3, paragraph a, Code
32 2024, is amended to read as follows:
33 a. All permits provided for in this subchapter shall expire
34 on June 30 of each year. A permit shall not be granted or
35 issued until the applicant has paid the fees to the department
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1 required in this subchapter for the next period ending on June
2 30 next, to the department or the city or county granting the
3 permit, the fees provided for in this subchapter. The annual
4 state permit fee for a distributor, cigarette vendor, and
5 wholesaler is one hundred dollars when the permit is granted
6 during the months of July, August, or September. However,
7 whenever a state permit holder operates more than one place of
8 business, a duplicate state permit shall be issued for each
9 additional place of business on payment of five dollars for
10 each duplicate state permit, but refunds as provided in this
11 subchapter do not apply to any duplicate permit issued.
12 Sec. 14. Section 453A.13, subsection 5, unnumbered
13 paragraph 1, Code 2024, is amended to read as follows:
14 Permits shall be issued only upon applications accompanied
15 by the fee indicated above, and by an adequate bond as provided
16 in section 453A.14, and upon forms furnished by the department
17 upon written request. The failure to furnish such forms shall
18 be no excuse for the failure to file the forms unless absolute
19 refusal is shown. Applications, any supporting documentation,
20 and the associated fees required by this section shall be
21 submitted to the department electronically. The forms shall
22 set forth all of the following:
23 Sec. 15. Section 453A.13, subsection 9, unnumbered
24 paragraph 1, Code 2024, is amended to read as follows:
25 Each permit issued shall describe clearly the place of
26 business for which it is issued, shall be nonassignable,
27 consecutively numbered, designating the kind of permit, and
28 shall authorize the sale of cigarettes, alternative nicotine
29 products, or vapor products in this state subject to the
30 limitations and restrictions herein contained. The retail
31 permits shall be upon forms furnished by the department or on
32 forms made available or approved by the department.
33 Sec. 16. Section 453A.14, subsection 1, unnumbered
34 paragraph 1, Code 2024, is amended to read as follows:
35 No A state or manufacturer’s permit shall not be issued until
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1 the applicant files a bond, with good and sufficient surety,
2 to be approved by the director, which bond shall be in favor of
3 the state and conditioned upon the payment of taxes, damages,
4 fines, penalties, and costs adjudged against the permit holder
5 for violation of any of the provisions of this subchapter. The
6 bonds shall be on forms prescribed by the director and shall be
7 filed electronically. A bond filed under this section shall be
8 in one of the following amounts:
9 Sec. 17. Section 453A.14, subsection 2, Code 2024, is
10 amended to read as follows:
11 2. A person shall not engage in interstate business unless
12 the person files a bond, with good and sufficient surety in an
13 amount of not less than one thousand dollars. A bond required
14 by this subsection shall be on forms prescribed by the director
15 and shall be filed electronically. The amount of the bond
16 required of the person shall be fixed by the director, subject
17 to the minimum limitation provided in this section. The bond
18 is subject to approval by the director and shall be payable to
19 the state in Des Moines, Polk county, and conditioned upon the
20 payment of taxes, damages, fines, penalties, and costs adjudged
21 against the person for violation of any of the requirements of
22 this subchapter affecting the person, on a form prescribed by
23 the director.
24 Sec. 18. Section 453A.15, subsection 7, Code 2024, is
25 amended to read as follows:
26 7. The director may require by rule that Any reports
27 required to be made under this subchapter shall be filed by
28 electronic transmission electronically.
29 Sec. 19. Section 453A.16, Code 2024, is amended to read as
30 follows:
31 453A.16 Manufacturer’s permit.
32 The department may, upon application of any manufacturer,
33 issue without charge to the manufacturer a manufacturer’s
34 permit. The application shall contain information as
35 the director shall prescribe and the application shall be
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1 submitted to the department electronically. The holder of a
2 manufacturer’s permit is authorized to purchase stamps from
3 the department, and must affix stamps to individual packages
4 of cigarettes outside of this state, prior to their shipment
5 into the state unless the cigarettes are shipped to an Iowa
6 permitted distributor or an Iowa permitted distributor’s agent.
7 Sec. 20. Section 453A.17, subsection 1, Code 2024, is
8 amended to read as follows:
9 1. Every distributing agent in the state, now engaged,
10 or who desires to become engaged, in the business of storing
11 unstamped cigarettes which are received in interstate commerce
12 for distribution or delivery only upon order received from
13 without the state or to be sold outside the state, shall
14 file with the department electronically, an application for
15 a distributing agent’s permit, on a form prescribed by the
16 director, to be furnished upon written request. The failure
17 to furnish shall be no excuse for the failure to file the same
18 unless an absolute refusal is shown. Said form shall set
19 forth the name under which such distributing agent transacts
20 or intends to transact such business as a distributing agent,
21 the principal office and place of business in Iowa to which
22 the permit is to apply, and if other than an individual, the
23 principal officers or members thereof and their addresses. The
24 director may require any other information in said application.
25 No distributing agent shall engage in such business until
26 such application has been filed and fee in the sum of one
27 hundred dollars paid for the permit and until the permit has
28 been obtained. Such permit shall expire on June 30 following
29 the date of issuance. All of the provisions of the last
30 two paragraphs of section 453A.14, relative to bonds, are
31 incorporated herein and by this reference made applicable to
32 distributing agents. Upon failure to furnish adequate bond
33 as required, the permit shall be revoked without hearing. An
34 application shall be filed and a permit obtained for each place
35 of business owned or operated by a distributing agent.
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1 Sec. 21. Section 453A.18, Code 2024, is amended to read as
2 follows:
3 453A.18 Forms for records and reports.
4 The department shall furnish or make available in electronic
5 form, without charge, to holders of the various permits, forms
6 in sufficient quantities to enable permit holders to make the
7 reports required to be made under this subchapter. The permit
8 holders shall furnish at their own expense the books, records,
9 and invoices, required to be used and kept, but the books,
10 records, and invoices shall be in exact conformity to the forms
11 prescribed for that purpose by the director, and shall be kept
12 and used in the manner prescribed by the director. However,
13 the director may, by express order in certain cases, authorize
14 permit holders to keep their records in a manner and upon forms
15 other than those prescribed. The authorization may be revoked
16 at any time. A report, book, record, invoice, and any other
17 document required to be submitted to the department under this
18 subchapter shall be submitted electronically.
19 Sec. 22. Section 453A.23, subsections 1 and 2, Code 2024,
20 are amended to read as follows:
21 1. Subject to this subchapter, a retailer’s permit may be
22 issued by the department to any dining car company, sleeping
23 car company, railroad or railway company. The permit shall
24 authorize the holder to keep for sale, and sell, cigarettes
25 at retail on any dining car, sleeping car, or passenger car
26 operated by the applicant in, through, or across t