Bill Summary – FastDemocracy

Fiscal Note
                                           Fiscal Services Division
SF 608 – Taxation, Penalties (LSB2795SV.1)
Staff Contact: Jeff Robinson (515.281.4614) jeff.robinson@legis.iowa.gov
Fiscal Note Version – As passed by the Senate
Description
Senate File 608 contains three divisions:
• Division I relates to tax administration, tax penalties, and the cancellation of tax permits that
   are not being used.
• Division II relates to composite return requirements for pass-through tax entities.
• Division III amends 2021 Iowa Acts, HF 309, by adding language related to the applicability
   of the provisions of that Bill to specified actions of the Department of Revenue (DOR).
Background
House File 309 passed the House on February 23, 2021, and passed the Senate in the same
form on April 13, 2021. As of April 29, 2021, the Bill had not been transmitted to the Governor.
Fiscal Impact
Only provisions in Division I that reduce tax penalties from 10.0% to 5.0% have a potential direct
impact on State revenue or expenditures. The DOR reports that the provisions of current law
that provide for 10.0% penalties for failure to file and 5.0% penalties for failure to pay tax in a
timely manner are not currently assessed together, and this position is confirmed in current
DOR tax penalty rules. While the Bill lowers the penalty for failure to file from 10.0% to 5.0%,
the Bill also allows the two penalties to be applied together. Therefore, the changes in the Bill
appear to allow the DOR to continue the current practice of assessing a 10.0% penalty for the
failure to both file a return and pay taxes in a timely manner.
Source
Department of Revenue
                                                                        /s/ Holly M. Lyons
                                                                          April 30, 2021
Doc ID 1220345
The fiscal note for this Bill was prepared pursuant to Joint Rule 17 and the Iowa Code. Data used in
developing this fiscal note is available from the Fiscal Services Division of the Legislative Services
Agency upon request.
                                            www.legis.iowa.gov
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Statutes affected: 
Introduced: 421.17, 422.25A, 422.25, 422.75, 423.24, 422.13, 422.16, 422.16B
Enrolled: 421.17, 422.25A, 422.25, 422.75, 423.24, 422.13, 422.16, 422.16B