Senate File 366 - Enrolled
Senate File 366
AN ACT
RELATING TO STATE TAXATION AND RELATED LAWS OF THE STATE
INCLUDING THE COLLECTION OF TAX, TAX CREDITS, THE ASSESSMENT
AND CLASSIFICATION OF PROPERTY, TAXES ON ELECTRICITY
PROVIDERS, FEES FOR REGISTRATION OF VEHICLES, SALES AND
USE TAX, AND THE AUTHORITY OF THE DIRECTOR OF REVENUE,
AND PROVIDING PENALTIES, AND INCLUDING EFFECTIVE DATE AND
RETROACTIVE APPLICABILITY PROVISIONS.
8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 DIVISION I
2 TAX CREDITS FOR CERTAIN SALES TAXES PAID BY THIRD-PARTY
3 DEVELOPERS
4 Section 1. Section 15.331C, Code 2021, is amended to read
5 as follows:
6 15.331C Corporate tax credit for certain sales taxes paid by
7 third-party developer Third-party developer tax credit.
8 1. An eligible business may claim a corporate tax credit
9 in an amount equal to the sales and use taxes paid by a
10 third-party developer under chapter 423 for gas, electricity,
11 water, or sewer utility services, goods, wares, or merchandise,
12 or on services rendered, furnished, or performed to or for a
13 contractor or subcontractor and used in the fulfillment of a
14 written contract relating to the construction or equipping of
15 a facility of the eligible business. Taxes attributable to
16 intangible property and furniture and furnishings shall not
17 be included, but taxes attributable to racks, shelving, and
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18 conveyor equipment to be used in a warehouse or distribution
19 center shall be included. Any credit in excess of the tax
20 liability for the tax year may be credited to the tax liability
21 for the following seven years or until depleted, whichever
22 occurs earlier. An eligible business may elect to receive a
23 refund of all or a portion of an unused tax credit.
24 2. A third-party developer shall state under oath, on
25 forms provided by the department of revenue, the amount of
26 taxes paid as described in subsection 1 and shall submit such
27 forms to the department of revenue. The taxes paid shall be
28 itemized to allow identification of the taxes attributable
29 to racks, shelving, and conveyor equipment to be used in a
30 warehouse or distribution center. After receiving the form
31 from the third-party developer, the department of revenue shall
32 issue a tax credit certificate to the eligible business equal
33 to the sales and use taxes paid by a third-party developer
34 under chapter 423 for gas, electricity, water, or sewer
35 utility services, goods, wares, or merchandise, or on services
1 rendered, furnished, or performed to or for a contractor or
2 subcontractor and used in the fulfillment of a written contract
3 relating to the construction or equipping of a facility.
4 The department of revenue shall also issue a tax credit
5 certificate to the eligible business equal to the taxes paid
6 and attributable to racks, shelving, and conveyor equipment to
7 be used in a warehouse or distribution center. The aggregate
8 combined total amount of tax refunds under section 15.331A for
9 taxes attributable to racks, shelving, and conveyor equipment
10 to be used in a warehouse or distribution center and of tax
11 credit certificates issued by the department of revenue for the
12 taxes paid and attributable to racks, shelving, and conveyor
13 equipment to be used in a warehouse or distribution center
14 shall not exceed five hundred thousand dollars in a fiscal
15 year. If an applicant for a tax credit certificate does not
16 receive a certificate for the taxes paid and attributable
17 to racks, shelving, and conveyor equipment to be used in a
18 warehouse or distribution center, the application shall be
19 considered in succeeding fiscal years. The eligible business
20 shall not claim a tax credit under this section unless a tax
21 credit certificate issued by the department of revenue is
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22 included with the taxpayer’s tax return for the tax year for
23 which the tax credit is claimed. A tax credit certificate
24 shall contain the eligible business’s name, address, tax
25 identification number, the amount of the tax credit, and other
26 information deemed necessary by the department of revenue.
27 3. An individual may claim a tax credit under this section
28 of a partnership, limited liability company, S corporation,
29 estate, or trust electing to have income taxed directly to
30 the individual. The amount claimed by the individual shall
31 be based upon the pro rata share of the individual’s earnings
32 from the partnership, limited liability company, S corporation,
33 estate, or trust.
34 Sec. 2. Section 15.335A, subsection 2, paragraph d, Code
35 2021, is amended to read as follows:
1 d. “Sales tax refund” means the sales and use tax refund as
2 provided under section 15.331A or the corporate tax credit for
3 certain sales taxes paid by third-party developers developer
4 tax credit as provided under section 15.331C.
5 Sec. 3. NEW SECTION. 422.11T Third-party developer tax
6 credit.
7 The taxes imposed under this subchapter, less the credits
8 allowed under section 422.12, shall be reduced by the
9 third-party developer tax credit authorized pursuant to
10 section 15.331C for certain sales taxes paid by a third-party
11 developer.
12 Sec. 4. Section 422.33, subsection 19, Code 2021, is amended
13 to read as follows:
14 19. The taxes imposed under this subchapter shall be reduced
15 by a corporate third-party developer tax credit authorized
16 pursuant to section 15.331C for certain sales taxes paid by a
17 third-party developer.
18 Sec. 5. Section 422.60, subsection 8, Code 2021, is amended
19 to read as follows:
20 8. The taxes imposed under this subchapter shall be reduced
21 by a corporate third-party developer tax credit authorized
22 pursuant to section 15.331C for certain sales taxes paid by a
23 third-party developer.
24 Sec. 6. EFFECTIVE DATE. This division of this Act, being
25 deemed of immediate importance, takes effect upon enactment.
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26 Sec. 7. RETROACTIVE APPLICABILITY. This division of this
27 Act applies retroactively to January 1, 2020, for tax years
28 beginning on or after that date.
29 DIVISION II
30 GEOTHERMAL HEAT PUMP INSTALLATION TAX CREDIT
31 Sec. 8. Section 422.12N, subsection 3, Code 2021, is amended
32 to read as follows:
33 3. a. A taxpayer must submit an application with the
34 department for each geothermal heat pump installation. The
35 application must be approved by the department prior to
1 claiming the credit, and the application must be filed by May 1
2 following the year of installation of the geothermal heat pump.
3 b. The department shall accept and approve applications
4 on a first-come, first-served basis until the maximum amount
5 of tax credits that may be claimed pursuant to subsection 4
6 is reached. If for a tax year the aggregate amount of tax
7 credits applied for exceeds the amount specified in subsection
8 4, the department shall establish a wait list for tax credits.
9 Valid applications filed by the taxpayer by May 1 following the
10 year of the installation but not approved by the department
11 shall be placed on a wait list in the order the applications
12 were received and those applicants shall be given priority
13 for having their applications approved in succeeding years.
14 Placement on a wait list pursuant to this subsection shall not
15 constitute a promise binding the state. The availability of a
16 tax credit and approval of a tax credit application pursuant
17 to this section in a future year is contingent upon the
18 availability of tax credits in that particular year.
19 Sec. 9. LEGISLATIVE INTENT. It is the intent of the general
20 assembly that the section of this division amending section
21 422.12N is a conforming amendment consistent with current state
22 law, and the amendment does not change the application of the
23 current law but instead reflects current law both before and
24 after enactment of this division of this Act.
25 Sec. 10. EFFECTIVE DATE. This division of this Act, being
26 deemed of immediate importance, takes effect upon enactment.
27 Sec. 11. RETROACTIVE APPLICABILITY. This division of this
28 Act applies retroactively to January 1, 2019, for tax years
29 beginning on or after that date.
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30 DIVISION III
31 TAXES ON ELECTRICITY PROVIDERS
32 Sec. 12. Section 437A.3, subsection 18, paragraph a,
33 subparagraph (2), Code 2021, is amended to read as follows:
34 (2) (a) An electric power generating plant, except a solar
35 energy conversion facility, where the acquisition cost of all
1 interests acquired exceeds ten million dollars.
2 (b) A solar energy conversion facility where the
3 acquisition cost of all interests exceeds one million dollars.
4 (c) For purposes of this subparagraph, “electric power
5 generating plant”:
6 (i) “Electric power generating plant” means each nameplate
7 rated electric power generating plant owned solely or jointly
8 by any person or electric power facility financed under the
9 provisions of chapter 28F or 476A in which electrical energy is
10 produced from other forms of energy, including all equipment
11 used in the production of such energy through its step-up
12 transformer.
13 (ii) “Solar energy conversion facility” means the same as
14 defined in section 476C.1.
15 DIVISION IV
16 FEE FOR NEW REGISTRATION —— VEHICLES
17 Sec. 13. Section 321.105A, subsection 2, paragraph a, Code
18 2021, is amended to read as follows:
19 a. For purposes of this subsection, “purchase price”
20 applies to the measure subject to the fee for new registration.
21 “Purchase price” shall be determined in the same manner as
22 “sales price” is determined for purposes of computing the tax
23 imposed upon the sales price of tangible personal property
24 under chapter 423, pursuant to the definition of sales price
25 in section 423.1, subject to the following exemptions. The
26 following are exempt from the fee for new registration imposed
27 by this subsection:
28 (1) Exempted from the purchase price of any vehicle subject
29 to registration is the The amount of any cash rebate which is
30 provided by a motor vehicle manufacturer to the purchaser of
31 the vehicle subject to registration so long as the rebate is
32 applied to the purchase price of the vehicle.
33 (2) (a) In transactions, except those subject to
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34 subparagraph division (b), in which a vehicle subject to
35 registration is traded toward the purchase price of another
1 vehicle subject to registration, the purchase price is only
2 that portion of the purchase price which is not valued in
3 money, whether received in money or not, if the following
4 conditions are met:
5 (i) The vehicle traded to the retailer is the type of
6 vehicle normally sold in the regular course of the retailer’s
7 business.
8 (ii) The vehicle traded to the retailer is intended by the
9 retailer to be ultimately sold at retail or is intended to be
10 used by the retailer or another in the remanufacturing of a
11 like vehicle.
12 (b) In a transaction between persons, neither of which is
13 a retailer of vehicles subject to registration, in which a
14 vehicle subject to registration is traded toward the purchase
15 price of another vehicle subject to registration, the amount
16 of the trade-in value allowed on the vehicle subject to
17 registration traded is exempted from the purchase price.
18 (c) In order for the trade-in value to be excluded from
19 the purchase price, the name or names The person listed on the
20 title and registration of the newly acquired vehicle being
21 purchased must be the same name or names person listed on the
22 title and registration of the traded vehicle being traded in
23 order to exclude the trade-in value from the purchase price.
24 The Additionally, the following trades qualify under this
25 subparagraph division (c):
26 (i) A trade involving between spouses, if the traded vehicle
27 and the acquired vehicle are titled in the name of one or both
28 of the spouses, with no outside party named on the title.
29 (ii) A trade involving a grandparent, parent, or child
30 between lineal family members, including adopted and step
31 relationships, if the name of one of the family members from
32 the title of the traded vehicle is also on the title of the
33 newly acquired vehicle.
34 (iii) A trade involving a business an entity, if one of the
35 owners listed on the title of the traded vehicle is a business,
1 and an entity. If multiple names are on the names on the title
2 are must be separated by “or”. For purposes of trades under
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3 this subparagraph subdivision, a sole proprietorship shall not
4 be distinguished from an individual owner.
5 (iv) A trade in which the vehicle being purchased is titled
6 in the name of an individual other than the owner of the traded
7 vehicle due to the cosigning requirements of a financial
8 institution.
9 (3) Exempted from the purchase price The fair market
10 value of a replacement motor vehicle owned by a motor vehicle
11 dealer licensed under chapter 322 which is being registered
12 by that dealer and is not otherwise exempt from the fee for
13 new registration, is the fair market value of a replaced motor
14 vehicle if all of the following conditions are met:
15 (a) The motor vehicle being registered is being placed in
16 service as a replacement motor vehicle for a motor vehicle
17 registered by the motor vehicle dealer.
18 (b) The motor vehicle being registered is taken from the
19 motor vehicle dealer’s inventory.
20 (c) Use tax or the fee for new registration on the motor
21 vehicle being replaced was paid by the motor vehicle dealer
22 when that motor vehicle was registered.
23 (d) The replaced motor vehicle is returned to the motor
24 vehicle dealer’s inventory for sale.
25 (e) The application for registration and title of the motor
26 vehicle being registered is filed with the county treasurer
27 within two weeks of the date the replaced motor vehicle is
28 returned to the motor vehicle dealer’s inventory.
29 (f) The motor vehicle being registered is placed in the same
30 or substantially similar service as the replaced motor vehicle.
31 Sec. 14. Section 321.105A, subsection 2, paragraph c,
32 subparagraph (1), Code 2021, is amended to read as follows:
33 (1) Entities listed in section 423.3, subsections 17, 18,
34 19, 20, 21, 22, 26, 27, 28, 31, and 79, to the extent that
35 those entities are exempt from the tax imposed on the sale of
1 tangible personal property, consisting of goods, wares, or
2 merchandise, sold at retail in the state to consumers or users.
3 Sec. 15. Section 321.105A, subsection 2, paragraph c,
4 subparagraph (3), subparagraph divisions (a) and (c), Code
5 2021, are amended to read as follows:
6 (a) Vehicles subject to registration which are transferred
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7 from a business or individual conducting a business within
8 this state as a sole proprietorship, partnership, or limited
9 liability company to a corporation formed by the sole
10 proprietorship, partnership, or limited liability company for
11 the purpose of continuing the business when all of the stock
12 of the corporation so formed is owned by the sole proprietor
13 and the sole proprietor’s spouse, by all the partners in the
14 case of a partnership, or by all the members in the case of a
15 limited liability company. This exemption is equally available
16 where the vehicles subject to registration are transferred from
17 a corporation to a sole proprietorship, partnership, or limited
18 liability company formed by that corporation for the purpose of
19 continuing the business when all of the incidents of ownership
20 are owned by the same person or persons who were stockholders
21 of the corporation. an entity doing business within this state
22 to another entity doing business within this state if all of
23 the following apply:
24 (i) The receiving entity was formed by the transferring
25 entity for the purpose of continuing the business.
26 (ii) (A) All ownership remains the same and in the
27 same proportions as the previous ownership with no fewer or
28 additional owners or replacement owners.
29 (B) In the case of a sole proprietorship, the spouse of the
30 sole proprietor may stand in place of the sole proprietor.
31 (c) This exemption applies to corporations that For an
32 exemption under this subparagraph, a receiving entity shall
33 have been in existence for not longer than twenty-four months.
34 Sec. 16. Section 321.105A, subsection 2, paragraph c,
35 subparagraphs (7), (8), (15), (18), and (19), Code 2021, are
1 amended to read as follows: