The bill establishes a regulatory framework for event-driven contracts traded on designated contract markets in Iowa. It introduces a new chapter (99H) that defines key terms such as "adjusted revenues," "event-driven contracts," and "designated contract market." The bill mandates that individuals or entities wishing to operate as designated contract markets must obtain a permit from the Department of Revenue, with an initial fee of $20 million and an annual renewal fee of $100,000. A tax of 20% on adjusted revenues from these contracts is imposed, with all generated revenues directed to the state's general fund. Additionally, the bill outlines the administration of these provisions, including the authority of the director of revenue to enforce compliance and collect taxes.

Furthermore, the bill includes provisions for the retroactive applicability of certain tax adjustments to January 1, 2026, and specifies that the designated contract market tax will begin on July 1, 2026. It also introduces a new excise tax (453F) on the purchase of event-driven contracts, set at 20% of the purchase amount, which will be collected by the designated contract market. The excise tax revenues will also be deposited into the general fund, and the director is tasked with administering this tax in conjunction with existing sales and use tax laws. The bill clarifies that it does not apply to other forms of wagering or financial derivatives not classified as event-driven contracts.

Statutes affected:
Introduced: 422.16, 422.35
Reprinted: 422.16, 422.35