HF 779 — A bill for an act relating to the administration of the tax and related laws by the department of revenue, including the administration and modification of certain tax credits and refunds, the individual and corporate income taxes, franchise taxes, moneys and credits taxes, sales and use taxes, and automobile rental excise taxes, the assessment of property owned by certain long distance telephone companies, establishing a taxation and exemption of computers task force, extending the utility replacement task force, and providing for other properly related matters, making penalties applicable, and including effective date and retroactive applicability provisions. (Formerly HSB 257.) Various effective dates, see bill.

4 oor rnoncash ncontribution opursuant nca sh c on tr ib ut ion p u rsu an t to ththis issection sshall ecreport tio n s ha ll re po rt to tthe hedepartment, d ep ar tm e nt, on a foform rmprescribed p re sc rib ed by ththe edepartment, d ep artm en t, by JJanuary an12 ua ry 1 2 of eaeach chtax ~calendar cyear aleall ndof athe rfollowing yinformation: ea r a ll o f th e fo llow i g in fo rm a tio n:

SSec. e c.

SeSection ctio422.11S, nsubsection 4 2 2 .llS , su bs ec tion 9, pparagraphs ara gr ap hs b anand dc, cCode ,2019, Care odamended e 20 19 , a re am e nd ed to reread ad as fofollows: llow s:

bb. .

TThe hetotal tonumber taand ldollar nuvalue mof bercontributions anreceived dand dthe oltotal larnumber vand aludollar evalue oof fthe ctax ocredits ntapproved ribduring utiothe nprevious stax recalendar ceyear. iv ed a nd th e to ta l nu m ber an d d o llar v alu e o f th e ta x c re d its ap pro v ed d urin g th e p rev io us ~ c a l e n d a r y e ar.

cc. .

A lilist stof o f the indindividual ivdonors idfor uthe alprevious dotax nocalendar rsyear fothat rincludes ththe edollar prevalue vof ioueach sdonation ~and cthe aledollar ndvalue a r y ea r th at in clu d es th e d o llar v alu e o f e ac h do n atio n an d th e d oll ar v alu e of eeach acapproved h ap pro ve d tax crcredit. ed it .

SSec. e c.

SeSection ctio422.12C, nsubsection 4 22 .12 C , su bs ec tion 4, CCode od2019, e 20 19 , is amamended ento dedread as fofollows: llo w s:

to4. rea d .

MMarried arrietaxpayers dwho taxhave pfiled ayjoint efederal rsreturns whelecting oto h av e file dseparate joreturns inor t f ed e ral re tu rn s e lec tin g to filfile eseparately seon p ar ate r etu rn s o r to fil e se p ar ate ly o n a cocombined mreturn b ined r etu rn form mmust udetermine stthe dchild ete rm in e th e ch ild and ddependent epcare encredit dunder ensubsection t c are c re d it un de r su bs ec tion 1 or ththe eearly eachildhood rlydevelopment ch ildh o od d ev elop m e nt tax crcredit edunder itsubsection un d er su b sec tio n 2 babased sedupon upotheir ncombined thnet eincome irand coallocate m b ined n e t in com e a nd a llo c ate the ttotal ocredit taamount l c re d it a m ou nt to eeach achspouse s po us e in ththe eproportion pthat roeach pospouse’s rtiorespective nnet thincome abears t e ac h sp o us e's re sp e ctiv e n et in com e b e ars to the ttotal ocombined talnet cincome. om b ined n e t in co m e.

NNonresidents on re sid en ts or t-ypart-year earesidents rof reIowa sidmust edetermine ntstheir oIowa fchild Iowand adependent mcare ucredit stunder dsubsection e term ine th e ir Io w a c h ild an d p ar d ep en de nt ca re c re d it u n der s ub se ctio n 1 oor r the eaearly rlychildhood cdevelopment hild h oo d d ev elop m e nt tax crcredit edunder itsubsection un d er su bs ec tio n 2 in ththe eratio ra tio of ththeir eIowa irsource Iownet aincome s ou rc e ne t in co m e to ththeir eall irsource anet llincome. so urc e n et inc om e.

NNonresidents oor npart-year resresidents idewho ntsare omarried rand paelect rt-y e ar r es id en ts w ho ar e m a rried a nd e le ct to ffile ileseparate sereturns p ara te re tu rn s or to file seseparately p ara te ly on a ccombined omreturn bform inemust dallocate rethe tuIowa rnchild foand rmdependent mcare uscredit tunder asubsection llo ca te th e Io w a c h ild a nd d ep en de nt ca re c re d it u nd er s ub se ctio n 1 oor r the eaearly rlychildhood cdevelopment hildtax hcredit oounder dsubsection de ve lop m e nt ta x c re di t u nd er su b se ctio n 2 bbetween etwthe eespouses n th e sp ou se s in ththe eratio raof tioeach ospouse’s fIowa eacsource hnet spincome o us e's Io w a s ou rc e ne t inco m e to ththe ecombined coIowa msource bnet iincome edof Iothe wtaxpayers. a so u rce n e t in com e o f th e tax p ay e rs.

tio n 2, p ara gr ap h b, C od e S e c.

10 .

S ec tio n 4 22 .60 , su bs ec 01 9, is a m end ed by a dd in g th e follo w in g n ew su b pa rag ra ph :

N EW S UB PA RA GR AP H.

(6) Fo r p u rpo se s of th is p ar ag rap h , ~ Int ern al R ev enu e C od e- m e ans th e In te rn a l R ev en ue C od e o f 95 4, p rio r to th e d ate o f its red e sig n atio n a s the I n tern a l R ev en ue C ode o f 19 86 by th e T ax R efo rm A c t o f 19 86 , o r m ean s Ho use F ile 77 9, p.

5 6 a s am e nded an d in e ffe ct on th e I nte rn al R ev enue C ode of D ecem be r 2 1, 2 01 7.

Th is d ef initio n sh a ll n ot b e c on strue d to in clud e any am en dm ent to th e In tern al Re venu e C ode en ac ted a fter th e d ate sp ec ified in th e pre ced ing se nte nce , in clu din g an y a me ndm ent w ith retro ac tiv e a p plic ab ility o r e ffec tive n ess .

OF PER SON AL PRO PER TY S ec.

11 .

L I E - IND EXCH AN GES UN DER CO RPO RAT E I COM E TAX AN D F RA NCH ISE TAX FO R TA X YEA R 019 .

N o tw ithsta ndin g any o the r p rov isio n o f law to the c on trary , a ll of the fo lo w ing s ha ll a pp ly w hen co m pu tn g n et inco m e f or pu rpo ses of the co rp ora tion inc om e ta x or fran ch ise tax u nd er s ec tion 4 22.3 5 f or tax y ears b egin nin g d urin g the 19 ca l nd ar ye ar:

T he rule s for no nr eco gn ition of ga in or los s fro m ex ch ang es o f rea l p rop erty h eld for p rod uc ti e use o r in ves t en t and n ot h eld p rim a rily f or sa le, as pro vid ed in se ctio n 103 1 o f th e In tern al Re ven ue C od e, a s a me nded up to an d in clu din g M arch 24, 20 18, ap ply for s tate inc om e t x pu rpo ses w ith reg ard to ex ch ang es o f rea l p rop erty .

T he ru l s for n on reco gn ition of g ain or los s fro m ex ch ang es o f p ro pe rty o th er t an re al pro p erty he ld for p rod uc tive use o r in ves t en t as pro vid ed in se ctio n 1 031 o f th e In te rna l R eve nue C ode, as am end ed up t a nd inc lud ing D ecem b er 1, 201 7, a pp ly for sta te inco m e ta x p urp o ses, no tw ithsta nd ing an y o th er p ro visio n of law to th e c on tra ry.

If th e ta xp ay e r' fe de ral tax ab le i com e inc lud es ga in or loss from pro p erty , o the r th an re al p ro pe rty d es crib ed in su bse ctio n 1, a nd the ta xp aye r e lec ts to hav e th is su bse ctio n app ly, the fo llow in g a djus tm en ts s ha ll b e m ad e:

a .

(1) S ub trac t th e to ta l am o unt of gain r elate d to the s ale or ex chan ge of the p rop erty as p rop erly re po rted fo r fe de ral tax p urp ose s u nde r th e Inte rn al Rev enu e C od e.

(2 ) Add ba ck any g ain rela ted to th e sa l o r e xch ang e o f th e p rop erty to th e ex ten t suc h g ain d oes no t q ua lify fo r d efe rra l u nd er s ectio n 10 31 of the In tern a l R even ue C o de, as a m ended u p to an d inc l d i g D ecem be r 21 , 2 017 , w hich g ain sh all be c alc ula ted us ing the ta xp ay er ' ad jus ted b asis in the p rop erty fo r sta te tax pu rpo se s.

b .

(1) A dd th e to tal am oun t o f lo ss rela ted to th e sale o r e xch ang e o f th e pro pe rty as pro pe rly rep orte d for fe de ral tax House F ile 779 , p .

6 purposes under th e I n te r n a l Revenue Code .

(2) S u b tra c t any lo s s r e la te d to th e s a le or exchange o f th e p ro p e rty to th e e x te n t such lo s s does not q u a lify fo r d e f e r r a l under s e c tio n 1031 o f th e I n te r n a l Revenue Code, as amended up to and in c lu d in g December 21, 2017, which lo s s s h a ll be c a lc u la te d u sin g th e ta x p a y e r's a d ju ste d b a s is in th e p ro p e rty fo r s t a t e ta x p u rp o ses.

c .

Any o th e r ad ju stm en ts to g a in s , lo s s e s , d e d u c tio n s, o r ta x b a s is fo r th e p ro p e rty given up o r receiv ed in th e s a le or exchange p u rsu an t to ru le s adopted by th e d ir e c to r .

10.

Section 422.60, subsection 2, paragraph b, Code 2019, is amended by adding the following new subparagraph:

NEW SUBPARAGRAPH .

(6) For purposes of this paragraph, “Internal Revenue Code” means the Internal Revenue Code of 1954, prior to the date of its redesignation as the Internal Revenue Code of 1986 by the Tax Reform Act of 1986, or means House File 779, p.

5 the Internal Revenue Code of 1986 as amended and in effect on December 21, 2017.

This definition shall not be construed to include any amendment to the Internal Revenue Code enacted after the date specified in the preceding sentence, including any amendment with retroactive applicability or effectiveness.

Sec.

11.

LIKE-KIND EXCHANGES OF PERSONAL PROPERTY UNDER CORPORATE INCOME TAX AND FRANCHISE TAX FOR TAX YEAR 2019.

Notwithstanding any other provision of law to the contrary, all of the following shall apply when computing net income for purposes of the corporation income tax or franchise tax under section 422.35 for tax years beginning during the 2019 calendar year:

1.

The rules for nonrecognition of gain or loss from exchanges of real property held for productive use or investment and not held primarily for sale, as provided in section 1031 of the Internal Revenue Code, as amended up to and including March 24, 2018, apply for state income tax purposes with regard to exchanges of real property.

2.

The rules for nonrecognition of gain or loss from exchanges of property other than real property held for productive use or investment as provided in section 1031 of the Internal Revenue Code, as amended up to and including December 21, 2017, apply for state income tax purposes, notwithstanding any other provision of law to the contrary.

If the taxpayer’s federal taxable income includes gain or loss from property, other than real property described in subsection 1, and the taxpayer elects to have this subsection apply, the following adjustments shall be made:

a.

(1) Subtract the total amount of gain related to the sale or exchange of the property as properly reported for federal tax purposes under the Internal Revenue Code.

(2) Add back any gain related to the sale or exchange of the property to the extent such gain does not qualify for deferral under section 1031 of the Internal Revenue Code, as amended up to and including December 21, 2017, which gain shall be calculated using the taxpayer’s adjusted basis in the property for state tax purposes.

b.

(1) Add the total amount of loss related to the sale or exchange of the property as properly reported for federal tax House File 779, p.

6 purposes under the Internal Revenue Code.

(2) Subtract any loss related to the sale or exchange of the property to the extent such loss does not qualify for deferral under section 1031 of the Internal Revenue Code, as amended up to and including December 21, 2017, which loss shall be calculated using the taxpayer’s adjusted basis in the property for state tax purposes.

c.

Any other adjustments to gains, losses, deductions, or tax basis for the property given up or received in the sale or exchange pursuant to rules adopted by the director.

Sec.

REFUNDS ~—— EARLY CHILDHOOD DEVELOPMENT TAX CREDIT.

NNotwithstanding otw ithstanding any pprovision roof v isio n o f law to ththe econtrary, cfor otax nyears tra ry , fo r ta x y ears beginning pprior r io r to January 11, , 2019, refurefunds nof dthe searly o f th e e a rly childhood developmdevelopment enttax tacredit x c r e d it provided in ssection e c tio n 422.12C, susubsection b se c tio n 2, reqrequested u ested on or aafter fthe teffective edate rof ththe eprovision eof fthis fdivision eof cthis tiv e d a te o f th e p ro v isio n o f t h i s d iv is io n o f th is Act amending ssection e c tio n 422.12C, susubsection b se c tio n 4, sshall h a ll not exceed ththe e amount allowallowed ed under ssection e c tio n 422.12C, susubsection b se c tio n 4, as amended by tthis hdivision iof sthis dAct. iv is io n o f th is A ct.

IIt tis ithe sintent thof ethe ingeneral teassembly nthat tthe oprovisions fof ththis edivision gof ethis n e ra l assem bly th a t th e p ro v isio n s o f t h i s d iv is io n o f t h i s Act amending ssection e422.11S care tioconforming n 4 2 2 .llS a re conform ing amendments cconsistent owith ncurrent sstate islaw, te n t w ith c u rre n t s t a t e law , and ththat athe t th e amendments do not change ththe eapplication aof pcurrent p lic a tio n o f c u rre n t law bbut uinstead treflect incurrent s te a d r e f l e c t c u rre n t law both bbefore e fo re and aafter fthe tenactment eof rthis thAct. e enactm ent o f t h i s A ct.

The fofollowing, llo w in g , being deemed oof fimmediate imimportance, mtake ediateeffect im portance, ta k e e f f e c t upon enactmenactment: ent:

The1. s e c tio n o f t h i s d iv is io n o f t h i s Act amending s e c tio n 422.12C, su b se c tio n 4.

The section of this division of this Act amending section 422.12C, subsection 4.

The ssection eof cthis tiodivision nof othis f t h i s d iv is io n o f t h i s Act rrelating e la tin g to refunds fofor rthe thearly e e a rly childhood developmdevelopment enttax tacredit. x c r e d it.

The ssection eof cthis tiodivision n of tthis h i s d iv is io n o f t h i s Act rrelating e la tin g to liklike-kind e -k in d exchanges oof fpersonal pproperty e rso n a l p ro p e rty under ccorporate o rp o ra te income tatax x and frafranchise ntax. c h is e ta x .

The fofollowing llo w in g apply rretroactively e tr o a c tiv e ly to January 11, , 2019, fofor rtax tayears x y ears beginning on or aafter fthat tdate: e r th a t d a te :

The1. s e c tio n o f t h i s d iv is io n o f t h i s Act amending s e c tio n 422.4, su b se c tio n 16, paragraph · e " , unnumbered paragraph 1 .

HouseThe Fsection ileof 779this ,division pof .this Act amending section 422.4, subsection 16, paragraph “e”, unnumbered paragraph 1.

7House .File 779, p.

The7 s2. e c t i ons of t h is d i vis io n o f t h i s Act amending s e c tio n 422.9, su b se c tio n 2A.

The sections of this division of this Act amending section 422.9, subsection 2A.

The ssection eof cthis tiodivision n of tthis h i s d iv is io n o f th is Act amending ssection e c tio n 422.12C, susubsection b se c tio n 4.

The ssection eof cthis tiodivision nof othis f t h i s d iv is io n o f t h i s Act amending ssection e c tio n 422.60, susubsection b se c tio n 2, paragraph "b“b”. ".

RETROACTIVE APPLICABILITY ~—— LIKE-KIND EXCHANGES OF PERSONAL PROPERTY.

The ssection eof cthis tiodivision nof othis f t h i s d iv is io n o f th is Act rrelating e la tin g to liklike-kind e -k in d exchanges oof fpersonal pproperty e rso n a l p ro p e rty under ccorporate o rp o ra te income tatax x and frafranchise ntax capplies hretroactively is e ta x a p p lie s r e tr o a c tiv e ly to January 11, , 2019, fofor rtax tayears x y e a rs beginning on or aafter fthat tdate, ebut rbefore th a t d a te , b u t b e fo re January 11, , 2020.

DIVISION III I ADMINISTRATIVE PROVISIONS Sec.

SSection e c tio n 422.20, Code 2019, iis s amended by adding ththe efollowing follow ing new susubsection: b se c tio n :

NEW SUBSECTION.SUBSECTION .

The departmdepartment ent may ppermit, e rm it, by rrule, uthe ledisclosure ,of thstate etax dinformation is c lo s u re o f s t a t e ta x in fo rm atio n to a pperson erso n a taxpayer has aauthorized u th o riz e d to rereceive c e iv e such sstate ttax ainformation, t e ta x in fothe rm a tio n , in th e manner pprescribed re s c rib e d by ththe edepartment. departm ent.

SSection e c tio n 422.72, Code 2019, iis s amended by adding ththe efollowing fo llo w in g new susubsection: b se c tio n :

NEW SUBSECTION.SUBSECTION .

The departmdepartment ent may ppermit, e rm it, by rrule, uthe ledisclosure ,of thstate etax dinformation is c lo s u re o f s t a t e ta x in fo rm atio n to a person a taxtaxpayer p ay er has aauthorized u th o riz e d to rereceive c e iv e such sstate t a t e tax ininformation, fo rm a tio n , in ththe e manner pprescribed re s c rib e d by ththe edepartment. departm ent.

DIVISION IIII I I SALES AND USE TAX Sec.

SSection e c tio n 423.1, susubsection b se c tio n 2, paragraphs b and cc, , Code 2019, aare re amended to read as fofollows: llo w s:

IIs sdirectly, dindirectly, ior rconstructively econtrolled c t l in d ir e c tly , o r c o n s tru c tiv e ly c o n tro lle d by ananother oentity thperson. er e a t i t y p erso n .

Is ssubject u b je c t to ththe econtrol cof o n tro l o f a common eentity aperson. t i t y p erso n .

A common eentity aperson tis ione twhich y p erso n i s oae wfiiefi a pperson erso n who owns ddirectly ir e c tly or iaindividually dindirectly iv id u a lly in d ir e c tly more ththan anten tepercent nof pthe evoting rcsecurities e n t o f th e v o tin g s e c u r itie s of ththe eentity. e n t i t y .

SSection e c tio n 423.2, susubsection b1, se c tio n 1 , paragraph aa, , subparagraph (5(5), ), subparagraph ddivision iv(a), is io n ( a ) , Code 2019, iis s amended to read as fofollows: llo w s:

HHouse ouseFile F779, ile 779 , p.

8 (a(a) ) If a sservice erv ice or wwarranty arracontract ntydoes conot nspecify trac t do es no t sp ec ify a fefee eamount amfor onontaxable untservices f or notaxable ntapersonal xabproperty, lethe servtax iceimposed spursuant o r t xa ble p erso na l p rop erty , th e t x im pos ed p ur sua nt to this sesection ctioshall n sh all be imimposed posupon ed u pon an amamount oequal untto eone-half quof althe tsales oprice ae fialf o f t e sa les pric e of the ccontract. on trac t.

SSec. ec.

2121. .

SSection ec423.2, tionsubsection 46, 23paragraph .k, Code 2019, is amended to read as follows:

, s ub sec tion 6 , pa rag raph k , C ode 019 , is am en ded to rea d a s fo llow s:

CCarpentry arprepair en try rep air and ininstallation s. talla tio n.

SSec. ec.

2222. .

SSection ec423.3, tionCode 42019, 23is .amended by adding the following new subsection:

,NEW CSUBSECTION ode. 20 19 , is am end ed by add ing the fo ll w ing new su bse ctio n:

NEW16A. S UB SEC TION .

16Aa. .

The sales price from the sale of a .grain bin, including material or replacement parts used to construct or repair a grain bin.

Th e s ales p rice from the sa le of a gra in bin , i clu din g m a t rial or rep lace m ent pa rts use d t c on stru ct o r rep air a g ra in b in .

FFor orpurposes p urp os es of this susubsection, b“grain secbin” tionmeans ,property ""gthat rain b in - m eans p rop erty th at is vevented ntedand ancovered dwith ccorrugated ovmetal eredor wsimilar ithmaterial, coand rrugthat ate d m etal o r sim ilar m a teria l, an d tha t is pprimarily rimused a rily u sed to hhold oldloose loograin sefor gdrying rain fo r d ryin g or stostorage. rag e.

SSec. ec.

2323. .

SSection ec423.3, tionsubsection 447, 23paragraph .c, subparagraph (3), Code 2019, is amended by striking the subparagraph and inserting in lieu thereof the following:

,(3) sThe ubfollowing secwithin tionthe 4scope 7,of psection arag427A.1, rapsubsection h1, c,paragraphs su“h” bpand arag“i”: rap h (3 ), C ode 20 19, is am end ed b y s trik ing t e su bp arag rap h a nd in ser ting in lie u the reo f t e follo w ing :

(3(a) )Computers. The fo lo w ing w ith in the sco pe of se ctio n 42 7A .l, io n 1, pa ragra ph s "b " and ""i":

su(b) bsMachinery. ec t (a ) Co m pu ters.

(b(c) )Equipment, Mincluding achpollution inerycontrol .equipment.

(c(d) )Replacement Eqparts. uipm e nt, in clu din g po llutio n co n trol equ ipm en t.

(d(e) )Supplies. Re place m ent pa rts.

(e(f) )Materials Suused ppto lies.construct or self-construct the following:

(f(i) )Computers. M a terials us ed to co ns truc t or se lf-c on stru c t th e fo llow in g:

(i)(ii) CoMachinery. m pu ters.

((iii) ii)Equipment, Mincluding apollution chincontrol ery.equipment.

((iv) iii)Replacement Eparts. qu ipm en t, o llutio n co ntro l e quip m en t.

in(v) cludSupplies. ing p (iv ) R eplac em en t p arts .

(vSec. ) Su pp lies.

S24. ec.

24Section .423.3, subsection 104, paragraph a, Code 2019, is amended to read as follows:

S ec tion 4 23 .

, s ub sec tion 10 4, para gra ph a, C ode 019 , is am en ded to read a s fo llow s :

TThe hesales sprice aleof sspecified pdigital ricproducts eand oof fprewritten scomputer pesoftware cifiesold, dand d igita l p ro du cts a nd of penumerated rewservices rdescribed itein nsection com423.2, psubsection uter1, soparagraph ft“a”, aresubparagraph so(5), ld,or andsection o423.2, fsubsection en6, umparagraphs eHouse ratedFile se779, rvicp. es d esc ribed i s ec tion 4 23 .

,9 s“bq”, ub“br”, sec“bs”, tionand 1“bu” ,furnished, p arag rap h "a - su bp arag rap h (5) , o r se ctio n 42 3.2 , su bs ec to na 6,commercial paenterprise ragrafor phuse sexclusively Houseby Fthe ilecommercial 779,enterprise. p .

9The ''bqN, ''br N, ''bs N, and ''buN fu rn ish e d ,to a com m ercial e n te r p r is e fo r use eof xprewritten c lu s iv e ly by th e com m ercial e n te r p r is e .The use o f p re w ritte n computer sosoftware, ftw a respecified ,digital aproduct, sor pservice efails cto ifiequalify d d i g i t a l p ro d u c t, o r s e rv ic e f a i lto q u a lify as a use eexclusively x c lu s iv e ly by ththe ecommercial comenterprise mif ercialits e n te r p r is e i f i t s use fofor r noncommercial purposes iis s more than de mminimis. inim is.

SSection e c tio n 423.14A, susubsection b3, se c tio n 3 , paragraph bb, , Code 2019, iis s amended by sstriking trthe ikparagraph. in g th e p arag rap h .

SSection e c tio n 423.14A, susubsection b3, se c tio n 3 , paragraph dd, , subparagraph (1(1), ), Code 2019, iis s amended to read as fofollows: llo w s:

(1) A mmarketplace arketplacefacilitator fthat a c i l i t a t o th a t makes or ffacilitates a c i l i t a t e s Iowa ssales a le s on iits t s own bbehalf eor hfor a lf o r fo r one or more mmarketplace arketplacesellers sequal e l l e r s eq u al to or exceeding one hundred thousand ddollars, o l l a r s , or in two hundred or more sseparate etransactions, pfor a ra te tr a n s a c tio n s , fo r an imimmediately mpreceding ediatelycalendar p reced in g calen d ar year or a ccurrent ucalendar rreyear. n t c a le n d a r year .

SSection e c tio n 423.14A, susubsection b3, se c tio n 3 , paragraph ee, , subparagraph (1(1), ), unnumbered paragraph 11, , Code 2019, iis s amended to read as fofollows: llo w s:

A rreferrer eif, ffor e r r e r i fo r any imimmediately mpreceding ediatelycalendar p reced in g calen d ar year or a ccurrent ucalendar rreyear, n t c a le n d a r y e a r, one hundred thousand ddollars o lla r s or more in Iowa ssales a le s or two hundred or more sseparate e p a ra te Iowa ssales atransactions leresult s tra n s a c tio n s r e s u lt from rreferrals e f e r r a l s from a pplatform laof tfothe rmreferrer. o f th e r e f e r r e rA r e f e r r e r i s not re q u ire d to c o lle c t and rem it s a le s and use ta x p u rsu an t to t h i s paragraph i f th e r e f e r r e r does a l l o f th e fo llo w in g :

A referrer is not required to collect and remit sales and use tax pursuant to this paragraph if the referrer does all of the following:

SSection e c tio n 423.14A, susubsection b se c tio n 3, paragraph ee, , subparagraph (1(1), ), subparagraph ddivision iv(c), is io n ( c ) , unnumbered paragraph 11, , Code 2019, iis s amended to read as fofollows: llo w s:

The rreferrer eprovides fthe edepartment rwith rmonthly e r p ro v id es th e departm ent w ith m onthly annual rereports p o rts in an eelectronic leformat c tr o n ic form at and in ththe e manner pprescribed re s c rib e d by ththe edepartment, d ep artm en t, which mmonthly onthly annual rereports pcontain oall rtsof cthe ofollowing: n ta in a l l o f th e fo llo w in g :

SSection e c tio n 423.14A, susubsection b3, se c tio n 3 , paragraph ee, , Code 2019, iis s amended by adding ththe efollowing follow ing new subparagraph:

NEW SUBPARAGRAPH.SUBPARAGRAPH .

(5) TThis his paragraph iis ssubject s u b je c t to imimplementation piem entation by ththe edepartment departm ent by rurule le and sshall h a ll not rerequire q u ire a rreferrer e f e r r e r to ccollect otax lle c t ta x or comply wwith iththe thnotice e n o tic e and rereporting prequirements o rtin g requirem ents and oother thprovisions eof rthis p ro v isio n s o f th is paragraph uunless n le ss and uuntil n t i l such aadministrative drules mtake ineffect. is tra tiv e ru le s tak e e f f e c t .

House FFile ile 779, pp. .

10 SecSec. .

3030. .

SSection e423.48, csubsection tio2, nparagraph 423c, .Code 2019, is amended by striking the paragraph.

48, su b se c tio n 2, paragraph c , Code 2019, i s amended by s tr ik in g th e p arag rap h .

A tataxation x a tio n and exemexemption ptionof ocomputers ftask comforce putersis tacreated. sk fo rc e i s c re a te d .

The departmdepartment entof o f revenue sshall hinitiate a ll i n i t i a t e and ccoordinate othe otask rdforce in a te th e ta sk fo rc e and pprovide rostaff vassistance. id e s t a f f a s s is ta n I t i s th e in te n t o f th e g e n e ra l assem bly th a t th e ta sk fo rc e in c lu d e re p re s e n ta tiv e s o f th e departm ent o f revenue;

aIt com m ercial e n te r p r is ethe thintent aof tthe claimgeneral sassembly anthat exemthe ptiontask foforce rinclude comrepresentatives putersof underthe sdepartment eof crevenue; tio n 423.3, su b se c tio n 47;

an a scommercial senterprise othat cclaims ia tio n th a t re p re s e n ts m an uexemption factufor rerscomputers andunder osection th423.3, esubsection r47; in d u s tr ia l p ro d u cers;

and an aassociation sthat srepresents omanufacturers cand iaother tioindustrial nproducers; th a t re p re s e n ts b u sin e ss ta x is s u e s The d ir e c to r of revenue or th e d i r e c t o r 's d esig n ee s h a ll se rv e as c h a irp e rso n o f th e ta sk fo rc e .

The ta sk fo rc e s h a ll be charged w ith review ing th e d e f in itio n of "com puter" as used throughout th e p o rtio n s o f th e Iowa Code and than eassociation Iowathat Arepresents dbusiness mtax inissues. istra tiv e Code ad m in istered by th e departm ent of revenue in c lu d in g th e exem ption fo r com puters provided in s e c tio n 423.3, su b se c tio n 47, paragraph " a " , subparagraph (4 ).

IThe fdirector thof e ta sk fo rc e recommends m o d ific a tio n s to th e c u rre n t d e f in itio n o f "com puter" in c lu d in g th e exem ption fo r com puters provided in s e c tio n 423.3, su b se c tio n 47, paragraph " a " , subparagraph (4 ), th e departm ent o f revenue sor hthe adirector’s lldesignee pshall roserve vas idchairperson eof anythe recommendationstask toforce. th e g e n e ra l assem bly by January 1 , 2020.

The task force shall be charged with reviewing the definition of “computer” as used throughout the portions of the Iowa Code and the Iowa Administrative Code administered by the department of revenue including the exemption for computers provided in section 423.3, subsection 47, paragraph “a”, subparagraph (4).

If the task force recommends modifications to the current definition of “computer” including the exemption for computers provided in section 423.3, subsection 47, paragraph “a”, subparagraph (4), the department of revenue shall provide any recommendations to the general assembly by January 1, 2020.

The fofollowing, llo w in g , being deemed oof fimmediate imimportance, mtake ediateeffect im portance, tak e e f f e c t upon enactmenactment: ent:

The1. s e c tio n of t h i s d iv is io n o f th is Act amending s e c tio n 423.1, su b se c tio n 2, p arag rap h s "b" and " c " .

The section of this division of this Act amending section 423.1, subsection 2, paragraphs “b” and “c”.

The ssection eof cthis tiodivision nof othis f t h i s d iv is io n o f t h i s Act amending ssection e c tio n 423.3, susubsection b se c tio n 47, paragraph "“c”, c " , subparagraph (3(3). ).

The fofollowing lloapplies wretroactively in g a p p lie s r e tr o a c tiv e ly to January 11, , 2019, fofor rtax tayears x y ears beginning on oor rafter athat fdate: t e r th a t d a te :

The ssection eof cthis tiodivision nof othis f th is d iv is io n o f t h i s Act amending ssection e c tio n 423.1, susubsection b se c tio n 2, pparagraphs arag“b” rap h s "b" and "“c”. c " .

The fofollowing lloapplies wretroactively in g a p p lie s r e tr o a c tiv e ly to January 11, , 2016, fofor rtax tayears x y e a rs beginning on oor rafter athat fdate: t e r th a t d a te :

The ssection eof cthis tiodivision nof othis f th is d iv is io n o f th is Act amending ssection e c tio n House FFile ile779, 779p. , p .

11 .423.3, subsection 47, paragraph “c”, subparagraph (3).

3, su b se c tio n 47, p arag rap h "c " , subparagraph (3 ).

SSection e c tio n 423.14A, susubsection b1, se c tio n 1 , paragraph bb, , subparagraph (3(3), ), Code 2019, iis s amended to read as followfollows: s :

(3) A -reBtal“rental platEermn,platform”, as ddefined ein fiasection e423C.2, dthat imeets athe srequirements edescribed cin tioperson a 423C.21 tfiat m eets tfie req u irem eats d e sc rib e d i a p erso n who iis s not rerequired q u ire d to ccollect o lle c t and remremit itautomobile automrental obileexcise rtax epursuant n ta l e x c ise ta x p u rsu an t to ssection e c tio n 423C.3, susubsection b se c tio n 3, paragrapfiparagraph -en,“c”, suaparagrapfisubparagraph (2(2), ),shall s h a ll not be coconsidered n sid ered a ''marketplace“marketplace fafacilitator” cilitawith torespect rN w ith re s p e c t to any ssale aof le o f a trtransportation aservice n s p o r ta tio n s e rv ic e under ssection e c tio n 423.2, susubsection b se c tio n 6, pparagraph arag“bf”, rap h ''bfn, or ssection e c tio n 423.5, susubsection b1, se c tio n 1 , paragraph -en,“e”, cconsisting oof nthe srental is tin g of thvehicles esubject r e n ta l o f v e h ic le s s u b je c t to rregistration e g is tr a tio n which aare reregistered rfor e g is te r e d fo r a ggross roweight ssof wthirteen eighttons o f th ir te e n to n s or leless sfor s fo r a pperiod e rio d of ssixty ix ty days or lless. e s s .

SSection e c tio n 423C.2, susubsection b se c tio n 3, pparagraphs arag rap h s a and bb, , Code 2019, aare re amended to read as fofollows: llo w s:

A person or any aaffiliate fof f i l i a t e o f a person ththat a t owns oor rcontrols c o n tro ls an automautomobile obile and makes ththe eautomobile automavailable obilefor arent v a ila b le fo r re n t through ththe e person or any aaffiliate, f f i l i a t e , or through a rrental eplatform aor tarental lfacilitator p la tfo rm o r r e a ta l f a c i l i t a t o r any oother thperson. e r p erso n .

A pperson erso n or any aaffiliate fof f i l i a t e o f a person who ppossesses o sse sse s or aacquires c q u ire s a rright igor hinterest t o r i n t e r e s t in any automautomobile obilewith w ith an inintent te n t to rerent nthe tautomobile th e autom obile to ananother operson, thor er p e r s o n ~ through tfiethe pperson erso a or aayany aaffiliate, f f i l i a t e , or tfirougfithrough a rrental eplatform a ta l p la tfo rm or a rrental efacilitator a t a l f a c i l i t a t o r any oother thperson. e r p erso n .

SSection e c tio n 423C.2, susubsection b se c tio n 6, Code 2019, iis s amended to read as fofollows: llo w s:

''F“Facilitation acilitationfee” feen means any cconsideration, o n s id e ra tio n , by wwhatever hatever name ccalled, athat lle d , th a trental afacilitator r e a t a l f a c i l i t a t o r or a rrental eplatform a ta l p la tfo rm person charges to a uuser serfor fofacilitating rthe fuser’s arental cof i l i t a t i n g th e u s e r 's r e n ta l o f an automautomobile. obile.

''F“Facilitation acilitationfee” feen does not ininclude c lu d e any commission an automautomobile obileprovider p ro v id e r pays to a rrental efacilitator aor t a lrental fplatform aperson cfor ifacilitating lthe irental tof a t o r o r a r e a t a l p la tfo rm p erso n fo r f a c i l i t a th e r e n ta l o f an automautomobile. obile.

SSection e c tio n 423C.2, Code 2019, iis s amended by adding ththe efollowing fo llo w in g new susubsection: b se c tio n :

NEW SUBSECTION.SUBSECTION .

''Hostn“Host” means ththe eregistered re g is te re d owner oof f an automautomobile obile made aavailable vfor asharing ila b le fo r sh a rin g through a ppeer-to-peer eHouse eFile r-to779, -pp. e e r H o use F ile 779 , p .

12 auautomobile tomsharing omarketplace. bile sh ari ng m ark etpla ce .

SSec. ec.

3939. .

SSection ec423C.2, tionsubsections 4 23C .2, su bse ctio ns 9 aand nd10, 10Code ,2019, Care odeamended 20 19, a re a m ended by strstriking ikinthe gsubsections. th e s ub se ction s.

SSec. ec.

4040. .

SSection ec423C.2, tionsubsection 411, 23CCode .2,2019, su bse ctio n 1 1, Co de 2 01 9, is amamended en ded to rearead das afollows: s f ollow s:

ean11. s a ll e o asia era tioa e harg ea fo r .

~Ren“Rental talprice” pricmeans eNall mconsideration thcharged efor reRthe tirenting gand aRfacilitation aof frenting ae ilitatio R of reRan tiRautomobile gbefore otaxes, fincluding aRbut anot atomlimited ob ie b efo re ta xe s, iae l aiR g b at R o t lim ite a to ffacilitation aefees, ilitatioreservation Rfees, feeservices s,fees, renonrefundable servdeposits, atioand Rany feother es,direct seor rvindirect ieescharge femade esor ,consideration aprovided oRin refaconnection aaawith ble ae p esits , a aa aR y o the rrenting a ire ct or iaafacilitation ire ct ch arge m aae or ce R siae ratio a p rev i ea iR eo R Rec ti R w ith th e ren tiR g o r f ac ilita tio n of rerenting ntiR g of aRan aateautomobile mthe ebsame ileas t“sales eprice” sam e a s ~sal es p rice N as defdefined i ed in sesection ctio423.1, nwhich 42 3.1 , w hich term incincludes ludbut es bu t is nnot otlimited lm ited to fafacilitation cfees, ilitatioreservation nfees, fservices eefees, s,nonrefundable resedeposits, rvand atioany nother feedirect s,or servindirect icecharge smade fee s, n on refun da ble de po sits , an d a ny oth er dir ec t o r in d irec t c harg e m ade or coconsideration nsprovided ide ratio n p rov ide d in conconnection newith ction w ith the rerenting ntinor gfacilitation oof rrenting fa c ilitatio n o f ren ting an auautomobile. tom ob ie .

SSec. ec.

4141. .

SSection ec423C.3, tionCode 422019, 3Cis .3,amended Co de 2 01 9, i s am e nded to rearead d as fofollows: llow s:

3C423C.3 .Tax on rental of automobiles —— collection and remittance of tax.

T1. ax o n ren tal o f a utom obile s ~ co llec tion an d re m itt nc e o f ta x.

FFor orpurposes parp os es of this ssection: ec tiea :

~B“Discount iscettHtrental Pcharge” enmeans t l c haP~ eH m eaas the amamount oan aatautomobile aprovider ncharges a atom ob ie p rov iae r ch arg es to a rrental eafacilitator talfor fathe cilitrental ato r fer th e ren tal of an aaautomobile, tomexcluding obany ieapplicable ,tax. e xclttaia g a ay ap plic ab le tax .

~'“Travel Fravelpackage” pmeans aekan a~eautomobile Hrental mbundled eawith asone aor nmore aseparate atomcomponents obilesuch reas Rlodging, talair btransportation, ttaaleaor wsimilar ithitems oaeand ocharged rfor m ere se pa rate cem p oR eats stch a ssingle loretail agprice. iag , a ir tra ftsp erta tien , er sim ila r item s aR a cha rge s fo r a sin g le r eta il p ric e.

~2. 1 .

A1. ta x of five p erc en t is im po sed upo n th e ren tal p rice o f an au tom o bile if the re n tal tran sa ctio n is sub jec t t o th e sale s a Ra se rvic es tax u nde r c hap ter 42 3, sub ch apte r I I, or th e use tax u nde r c hap ter 42 3, sub ch apte r I II.

TA hetax tof xfive shpercent allis nimposed otupon bthe erental iprice pof osed on an yautomobile renif talthe tranrental satransaction ctiois nsubject noto t ta xa ble un der the ssales tateand sservices ales an a s erv ice s tax ,under achapter s423, psubchapter rovII, idedor inthe se ctio n 42 3.3 , o r th e sta te use tax ,under achapter s423, psubchapter rovIII. ide d in sec tion 4 23 .6, o n a uto m ob ile re n tal rec eip ts • .a.

2The .tax shall not be imposed on any rental transaction not taxable under the state sales and services tax, as provided in section 423.3, or the state use tax, as provided in section 423.6, on automobile rental receipts.

~his3. s abs eetio R sh a ll g eve ra th e co llec to ft a fa re m ittaa ce of the ta x i pose s a nae r s ab see tioa 2 The tax H ou se Fil e 779 , p .

132. im po sed un der su bse ctio n 1 sh a ll be co lle cted a nd rem ite d to th e d ep artm en t by a ll p erso ns re qu ired to c olle ct sta te sa les an d u se tax on th e r en tal tran sa ctio n und er ch apte r 4 23 .

This subsection shall govern the collection and remittance of the tax imposed under subsection 2 The tax House File 779, p.

13 imposed under subsection 1 shall be collected and remitted to the department by all persons required to collect state sales and use tax on the rental transaction under chapter 423 .

UUnless aleotherwise ssprovided ein thethis rwsubsection, isethe proautomobile vidprovider edshall iacollect th is sab se ctio a, the aa tom o bile pro vid er sh all co lle ct t e tax by adadding dia~the th e tax to ththe erental rprice ea tal pric e of the aaautomobile temand ethe biletax, aadwhen thcollected, eshall ta x, w fea co llec ted , sh a ll be stastated tedas a sdistinct a d istia et item sepseparate araand teapart aad ap ar t from ththe erental rprice en tal pric e of the aaautomobile temand othe bilesales aadand thservices e s ale s a ad ser vic es tax iimposed punder osedchapter aad423, e:rsubchapter chII, apor terthe 42use 3, s abc ha pte r II , o r th e 1:se tax imimposed pounder sedchapter tttder423, chsubchapter apIII. t r 423 , s1::1behap tr III .

IIf f a traatransaction sac tioB for ththe erental reB tal of aaan aatoautomobile minvolves eb ile i v olv es a rerental atafacilitator, lall fa c ilita tor , a ll of the fofollowing loshall woccur iBgin sthe haorder llprescribed: o cc ar iB th e o rde r p resc ribe d :

(1(1) )The ~herental refacilitator ntashall lcollect fthe actax ilitaon torany srental haprice llthat c olle c t the tauser xpays oa a ay re ata l p ric e th a t th e a ser pa ys to the rerental ntafacilitator l f ac ilita to r in U te sa me m ann er a s aft a atom ob ie pro r;ide r 1:1Bder pa rat1rap h ""a"" (2 ) (a) U ftless othe rw ise re qa i ed by re.le or erd er of th e d ep artm e at, th e reftta l fa c ilitat or sh a ll re m it to th e a1::1tom ebil pre r;i er th at p o rtion o f th e ta x co llee ted en t~ e re ata l p ric e th a t re pre se nts the dsame imanner eoaas Ban tautomobile reprovider ataunder lparagraph e“a”. hart1e .

(b(2) )(a) NoUnless aotherwise sserequired ssmby enrule t s ha ll b e m ade ag aiftst a re fttal fac ilita to r fo r ta x dae Oft a disc oaftt rea ta l ch ar~e i f th e rea ta l fa c ilitat or corder olleof ctethe ddepartment, tthe erental taxfacilitator aashall dremit rem itte d i t to athe aautomobile aprovider atomthat obportion ieof pthe rov ide r th at has a va lid tax pecollected rmon itthe rrental eqprice airedthat arepresents adethe rdiscount thrental ischarge. ch ap ter or aad er ch ap ter 423 .

~(b) hisNo saassessment bpshall aragbe rapmade hagainst d iv isio a srental hafacilitator llfor retax atadue lon fa c ilitato r an d a atomdiscount obrental iecharge p rov ide r a ot a PI'Y if ththe erental arfacilitator ecollected athe fftax iliaand tesremitted ,it o r if th e de partm e at req aire s th e re ata l fa c ilitat or to rean mautomobile itprovider taxthat eshas c olle cted o a thavalid ttax ppermit ortiorequired aunder ofthis thechapter saor lesunder pchapter rice423. th at rep re sen ts th e dis co aat re nta l ch arg e d ire ctly to th e d ep artm e nt.

~heThis resubparagraph atadivision lshall fnot acapply ilitaif tothe rrental sfacilitator haand llautomobile reprovider mare itaffiliates, anor yif remthe adepartment irequires ingthe taxrental ifacilitator tto (3remit )taxes ccollected olleon ctethat dportion toof tthe esales deprice partmthat ent.represents the discount rental charge directly to the department.

(4(3) )The (a)rental ~hfacilitator eshall aatoremit many obremaining iletax p rov ide r s ha ll c o llec t aad re m it tocollected th e d ep artm ea t an y ta xe s th e re nta l fa c ilitat or re m itted to th e a atom ob ie p rov ide r, a ad sh all co lle ct a nd rem i to the dedepartment. partm e A t aAy tax es da e O f a ny am oaA t o f re nta l p ric e th e ase r p aid to the aa tom o bile pro v ide r.

(b(4) )(a) NoThe assesautomobile smprovider eHshall tcollect sand haremit llto bthe edepartment many adetaxes agthe aiHrental stfacilitator anremitted aatemto obthe ileautomobile pprovider, rovand ideshall rcollect foand rremit ato fythe taxdepartment daany etaxes odue non aany damount iof corental unprice tthe reuser Hpaid talto cthe harautomobile geprovider. tha t House Fi l e 779 , p .

14(b) wasNo notassessment remshall ittedbe tomade tfieagainst atttomobilean automobile provider byfor aany rentax taldue fon a cdiscount ilitarental tocharge r~Riathat stt8para~rap8House diviaioaFile s8779, ap. ll Rot apply i f the atttomobile provider aftd tfie reR tal fa c ilita to r are a f f ilia te s .

(5)14 Notwithstandingwas anynot otherremitted provision ef th is paragraph to tfie contrary, i f a ren tal fa c ilita to r aad i t s a f f ilia te s f a c ilita te to ta l ren tals ttnder tfiis chapter and chapter 423A th at are eqttal to or less thaa an aggregate amottat of reR tal price aftd sales price of tea tfiottsaRd d o llars for an iftlfftediately preeediRg calendar year or a earreRt caleRdar year, or in tea or fewer separate traasactio as for an ifftfftediately precediag calendar year or a cttrreat caleadar year, the reatalautomobile faprovider cby ilita to r sh a llrental aotfacilitator. be reqttired to c o lle c t tax Oft the amottnt of sales price th at represents the ren tal fa c ilita to r ' s fa c ilita tio n fee.

This subparagraph division shall not apply if the automobile provider and the rental facilitator are affiliates.

(5) Notwithstanding any other provision of this paragraph to the contrary, if a rental facilitator and its affiliates facilitate total rentals under this chapter and chapter 423A that are equal to or less than an aggregate amount of rental price and sales price of ten thousand dollars for an immediately preceding calendar year or a current calendar year, or in ten or fewer separate transactions for an immediately preceding calendar year or a current calendar year, the rental facilitator shall not be required to collect tax on the amount of sales price that represents the rental facilitator’s facilitation fee.

(1) If a transaction for the renrental tal of aaan atttomobileautomobile involves a renrental talplatform, platform , other than a renrental tal platform described in sttbparagraphsubparagraph (2), the renrental tal platform shshall acollect ll c o lle c t and remit the tax imposed ttnderunder ththis ischapter cfiapter in the same maanermanner as an atttomobileautomobile provider ttaderunder paragraph ~aN.“a”.

~(2) 3.

A renrental tal platform person is not required to colleccollect t and remit the tax imposed under ththis is chapter in the same maaaermanner as an atttomobileautomobile provider ttnderunder paragraph ''aN“a” iif f the renrental tal platform person meets aall l l of the following requirements:

The person or any aaffiliate f f ilia te of the person is not an automobile provider.

The person or any aaffiliate f f ilia te of the person fafacilitates c ilita te s the renting or sharing of an automobile by doing aall l l of the following:

(1) The person owns, operates, or controls a peer-to-peer automobile sharing marketplace ththat at allows a host or an automobile provider who is not an aaffiliate f f ilia te of the person to offer or llist i s t an automobile for sharing or rent on the marketplace.

For purposes of ththis is paragraph, iit t is immaterial whether or not the automobile provider has a tax permit under ththis is chapter or chapter 423 or whether the automobile is owned by a natural person or by a business eentity. n tity .

(2) The person or aaffiliate f f ilia te of the person ccollects o lle c ts or processes the renrental tal price charged to the user.

+a+(a) c.

The only sales the renrental tal platform person and House FFile ile 779, pp. .

15 ±-es-aits faffiliates fof ithe l i a t e s o f th e person ffacilitate athat care isubject l i tth a t a re s u b je c t to tatax x under chchapter ap ter 423 aare resales sof a letransportation sservice o f a tra n s p o rta tio n s e rv ic e under ssection e c tio n 423.2, susubsection b se c tio n 6, paragraph ~bfn,“bf”, or ssection e c tio n 423.5, susubsection b1, separagraph c“e”, tioconsisting nof 1the ,rental pof aragvehicles rapsubject h ~en, c o n s is tin g o f th e r e n ta l o f v e h ic le s s u b je c t to rregistration e g is tr a tio n which aare reregistered rfor e g is te r e d fo r a ggross roweight ssof wthirteen eighttons o f th ir te e n to n s or leless sfor s fo r a pperiod eof riosixty d o f s ix ty days or lless. e s s .

(b) The rrental eplatform aoperates ta l p la tfo rm o p e ra te s a ppeer-to-peer eerautomobile tosharing peermarketplace. aetom obile sh a ria g m ark etp lace.

f-3-t(3) 4.

For any rrental etransaction nfor ta l tra n s a c tio n fo r which ththe erental rplatform e a t a l p la tfo rm a person iis srequired re q u ire d to or eelects le c ts to ccollect o lle c t and remremit itthe thtax e ta x under tthis hchapter, ithe srental cplatform h a p te r, th e r e a ta l p la tfo rm person sshall halso a ll a ls o be lliable ifor athe bcollection l e fo r th e c o lle c tio n and reremittance mof itta n c e o f any ssales a le s or use tatax x due on ththat atransaction t tra n s a c tio n under ssection e c tio n 423.2, susubsection b se c tio n 6, paragraph ~bfN,“bf”, oor rsection s e c tio n 423.5, susubsection b1, se c tio n , paragraph ~en,“e”, nnotwithstanding o tw ith stan d in g any oother thprovision e r p ro v isio n to ththe econtrary c o n tra ry in chchapter ap ter 423.

f-4+(4) 5.

For any rrental etransaction nfor ta l tra n s a c tio n fo r which ththe erental rplatform e a ta l p la tfo rm person iis s not rerequired q u ire d to ccollect o lle c t and remremit itthe thtax e ta x under ththis ischapter ch ap ter as provided under sebparagraphsubparagraph (2) susubsection b se c tio n 3, ththe eautomobile automprovider obileshall p ro v id e r s h a ll be ssolely oliable lefor ly l i a b l e fo r any amount oof funcollected u n c o lle c te d or uunremitted ntax rem itted ta x under tthis hchapter i s ch ap ter and chchapter ap ter 423.

433.4A CCompetitive om petitive long ddistance ista n c e telephone company pproperty. ro p e rty .

For assessmassessment entyears y ears beginning bbefore e fo re January 11, , 2022, ththe edirector dof ir e c to r o f revenue sshall hassess athe llproperty aof s s e s s th e p ro p e rty o f a long ddistance istelephone ta n c e telep h o n e company, as ddefined efin ed in ssection e476.1D, csubsection tio n 476.lD , su b se c tio n 10, Code 2018, ppreviously reclassified v io u sly c l a s s i f i e d by ththe eutilities u t i l i t i e s board as a cocompetitive m p etitiv e long ddistance istelephone ta n c e telep h o n e company under ssection e476.1D, csubsection tio n 476.lD , su b se c tio n 10, Code 2018, which pproperty rois pfirst eassessed rtyfor itaxation s f i r s t a sse sse d fo r ta x a tio n in tthis hstate i s s t a t e on or aafter f t e r January 11, , 1996, in ththe e same manner as aall lother lproperty oassessed th e r p ro p e rty a sse sse d as comcommercial mproperty ercial p ro p e rty by ththe elocal loassessor c a l a sse sso r under cchapters h a p te rs 427, 427A, 427B, 428, and 441.

TThis hisdivision dof ivthis isAct, io n o f th is A ct, being deemed oof fimmediate imimportance, mtakes ediateeffect im portance, ta k e s e f f e c t upon enactmenactment. ent.

HHouse oFile use779, Fp. il e 77 9 , p .

116 6Sec. S ec .

4444. .

RERETROACTIVE TRAPPLICABILITY. O AC TIV E AP PL ICA B ILIT Y .

TThis hdivision is d iv is ion of ththis isAct Aapplies cretroactively t a pp lie s re tro a ctiv e ly to JuJuly ly1, 12018. , 20 18 .

DDIVISION IVVI ISIOTARGETED NJOBS VWITHHOLDING ICREDIT TASec. RG ETE D JO BS W ITH H OL DIN G CR ED IT S e c.

4545. .

SSection ec403.19A, tiosubsection n3, 40paragraph 3.1c, 9Asubparagraph ,(2), suCode b2019, se ctio n 3 , p a rag rap h c , su b pa rag ra ph (2 ), Co de 2 01 9, is amamended end ed to reread ad as fofollows: llo w s:

c t c ity a nd th e e con om ic d ev elo pm en t (2) ThThe epilot piproject locity tand pthe roeconomic jedevelopment aauthority utshall honot ritenter yinto sh a llwithholding noagreement tafter enJune ter30, in2019 to2021. a w ithh o ldin g a gre em e nt a fte r Ju n e 30 , ~ 20 21 .

DDIVISION IVVII ISIOSCHOOL NTUITION VORGANIZATION II S CH OO L TU IT I N O R GA N I A TION TAX CCREDITS RSec. ED ITS S e c.

4646. .

SSection ec422.11S, tiosubsection n8, 4paragraph 22a, .llSsubparagraph ,(2), suCode b2019, se ctio n 8 , pa rag ra ph a , su b pa rag ra ph (2 ), Co de 2 01 9, is amamended end ed to reread ad as fofollows: llo w s:

(2) ~T“Total otaapproved l a p pro ve d tax ccredits” remeans dfor itsnthe m e ans fo r th e tax yyear ebeginning ar b eg inn in g in th e 2 006 c ale n da r ye ar , t o m illio n fiv e h un d red the 2002006 7calendar thyear, outwo samillion ndfive dhundred othousand lladollars, rsfor , fo r the tatax xyear ybeginning ea r be gin nin g in cthe ale2007 ndcalendar ayear, rfive ymillion edollars, ar, fi ve m illio n d o lla rs , for tatax xyears ybeginning eaon rs b eg inn in g o n or aafter fteJanuary r Jan u ary 1, 202008, 08but ,before buJanuary t be fo re Ja nu ary 1, 22012, 01seven 2,million sevfive enhundred mthousand illiodollars, nfor fivtax eyears hbeginning unon dror edafter thJanuary ou1, san2012, dbut dbefore oJanuary lla1, rs2014, ,eight fmillion orseven tahundred xfifty ythousand eadollars, rsand bfor egtax innyears ingbeginning oon n or aafter fteJanuary r Ja nu ary 1, 202014, 1but 2,before buJanuary t be fo re Ja nu ary 1, 22019, 01twelve 4,million eigdollars, hand t m illio n se ve n hu nd red f ift y th ou sa nd d o lla rs , i t- for tax yyears eabeginning rs b eg inn in g on oor rafter afJanuary ter1, J2019, anbut uabefore ryJanuary 11, ,2020, 20thirteen 14million ,dollars, band ufor t b ef ore J an u ary 1 , 01 9, tw e lve m illio n d o lla rs, iHt6- fo r ta x ye a rs be gin n ing o n o r af ter J an ua ry 1 , 20 19 , b u t b ef ore J an ua ry 1 , 20 20 , t hi rte en r m illio n d o lla rs, a nd fo r tax yeyears arbeginning son be gin nin g o n or aafter fteJanuary J1, an2020, uafifteen rymillion 1dollars. , 2 02 0, fi fte en m i llion do ll ar s.

SeSec. c.

447. 7.

CCONTINGENT ONCODE TINEDITOR GEDIRECTIVE. NT C OD E ED ITO R D IRE C TIV E.

TThe hCode eeditor C o de ed ito r is dirdirected ec te d to hharmonize armthe onsection izeof ththis edivision seof ctiothis nAct oamending fsection th422.11S iswith d iv isio n o f th is A c t am end ing s ec tio n 4 2 2.llS w ith th e o the rother ddivision ivisof iothis nAct oamending fsection t422.11S, hiif senacted, A c t am end ing s ec tio n 4 2 2.ll S, i f en ac ted , by cchanging ha ng ing tax yyear ea r to cacalendar lenyear dwhere arappropriate ye ar w h ere ap p ro p riat e and to mmake akeother orelated thchanges, er re la ted c ha ng es , if nnecessary, ec ess ar y, to eeffectuate ffsuch ecchanges. tu ate suc h ch an g es.

DDIVISION IVIII ISINCOME IO N V III I CO M E TAX CHCHECKOFFS ECSec. KO FFS Se c.

448. 8.

SSection e173.22, ctiosubsection n2, 1Code 732019, .22is ,amended su bs ec tio n 2 , C od e 20 19 , i s am en de d to rearead d as ffollows: ollo w s :

A fofoundation ufund nd a tion f un d is ccreated reawithin tethe dstate wtreasury ithcomposed inof thmoneys eappropriated sor tatavailable e tre as u ry c om p ose d o f m on eys a pp ro p riat ed o r av a ilab le to anand dobtained o b tain e d or aaccepted ccby epthe tedfoundation. b y th e fo un d atio n .

ThThe efoundation fofund unshall dainclude tioHouse nFile fun779, d s h all in clu d e H ouse F ile 77 9, p.

17 mmoneys onecredited ysto cthe redfund ited t o t he f und as proprovided vid ed in sesection ctio422.12D n422.12I. 422 .129 22 .

2ISec. .

S ec.

SSection ec422.12E, toCode n2019, 42 2.12 E, Cod e 2 019 , is amamended en ded to read aas sfollows: fo ll w s:

2.12E422.12E IIncome comtax ereturn tcheckoffs xlimited. retu rn che ck offs li ited .

FO1. E t x yea£ S eegiftftitg Oft 0£ afte £ Jaftta£ y 11 2 919 , th e£e T here sh a ll be allow e d n o m ore tha n fou r inc om e ta x re turn c he cko ffs on each inc om e ta x retu rn .

FFor or tax yyears earsbeginning bon eginor ningafter oJanuary n o r a fter Ja nu ary 1, 2012019, 7,there wheThere nshall thbe eallowed sano mmore ethan fofour urincome inco m e ta x retu rn ch eck off s ha ve bee n p rov ided o n th e i com e tax rreturn etucheckoffs rn for tw o c on seceach utiveincome tax yreturn. ea rs, the tw o ch ec ko ffs fo r w hich th e le as t am o unt h as bee n c on trib ute d, in the ag gre gate fo r th e firs t tax ye ar a nd thro ug h M a r h 1 5 a fter th e e nd of the sec on d ta x ye ar, are rep ea l d on De cem ber 31 a fte r t e end of th e s econ d tax ye ar a nd sh all be rem ove d from the re turn fo rm .

IFor ftax myears orebeginning chon eckor offsafter areJanuary e1, nac2017, tedwhen in the samsame efour sesincome siontax oreturn fcheckoffs rahave lbeen asseprovided mon blythe thaincome ntax treturn efor retwo isconsecutive stax pacyears, ethe fotwo rcheckoffs incfor lusiowhich n on the thleast eamount ghas enbeen econtributed, in divthe iduaggregate alfor taxthe refirst turntax foyear rmand ,through thMarch e15 cafter hethe ckoend ffsof wthe itsecond thtax eyear, eaare rlierepealed ston eftaDecember eted31 eheafter ekothe ££send da te of enathe ctmsecond entax tyear asand deteshall rm ined p ursu an t to se ctio n 3.7 fo r w hich th ere is sp ace fo r in clu sio n o n th e re turn fo rm sh a ll be incremoved ludfrom ed on the rereturn turnform. fo rm , an d a ll oth er ch ec ko ffs e na cted du ring th at ses sion o f th e gen era l as sem bly a re repe aled o n D ecem b er 31 o f th e y ear of en actm e nt.

If2. m ore ch eck offs are e nac ted in the sam e ses sion o f th e g en era l as sem bly tha n the re is spac e for inc lus ion on the in div idu al inc om e t x form aftd the ad ditio ftal c he cko ffs a£e eftae t d Of th e s me da y a nd it is i de term in ab le w h i h c hec ko ffs hav e th e e a rlie st d ate of en actm en t p ursu an t to se ctio n 3.7 , th e d irec tor sh a ll de term in e w hich c hec ko ffs s ha ll b e in clu ded on th e retu rn form , and a ll o the r ch ec ko ffs n ot inclu de d on t e re turn fo rm sh a ll be rep ea led on D ecem ber 31 of the ye ar o f e nactm e nt a nd sh all no t be inc lud ed on the re turn fo rm .

aIf .more checkoffs are enacted in the same session of the general assembly than there is space for inclusion on the individual tax return form, the checkoffs with the earliest enacted checkoffs date of enactment as determined pursuant to section 3.7 for which there is space for inclusion on the return form shall be included on the return form, and all other checkoffs enacted during that session of the general assembly are repealed on December 31 of the year of enactment.

BIf ymore Jcheckoffs ulyare 1enacted in the same session of the yegeneral arassembly inthan wthere his ispace hfor twinclusion oon chethe ckindividual offsincome aretax reform peand aledthe padditional ursucheckoffs anare tenacted toon suthe bssame ectioday nand 1,it theis deindeterminable partmwhich echeckoffs nthave sthe haearliest lldate nof oenactment tfpursuant yto thsection e3.7, Ithe wdirector ashall Cdetermine odewhich edcheckoffs itorshall wbe hichincluded twoon chthe ecreturn koform, ffsand receall ivedother thcheckoffs enot leaincluded ston amthe oreturn untform oshall fbe crepealed on tribDecember utio31 nsof anthe dyear aof reenactment repand ealeshall d.not be included on the return form.

3.

a.

By July 1 of the year in which two checkoffs are repealed pursuant to subsection 1, the department shall notify the Iowa Code editor which two checkoffs received the least amount of contributions and are repealed.

BBy ySeptember S eptem b er 1 oof f any aapplicable ppyear, licathe bledepartment yeshall ar,notify the deIowa parCode teditor entof sany harepeal llpursuant n otify th e Iow a C ode ed ito r o f an y r epe al pu rsua nt to susubsection b sec ti n 2.

HHouse ouseFile F779, ile 77 9, p.

18 SeSec. c.

5050. .

NEW SSECTION. ECT I N .

422422.12G .12GJoint Joincome in t inco me tax chcheckoff eck off for vveterans eteratrust nsfund tru st fu nd and vovolunteer lun teer fire figfighter hpreparedness terfund. prep ared ne ss fu nd .

A1. pe rson w ho f iles a n in div id ua l or a join t in com e tax re turn w ith th e d epa rtm en t of rev enu e u nd er s ec to n 42 2.13 m ay d esig na te o ne do llar or m ore to b e p aid jo in tly to the ve tera ns tru s t fun d cre ated in se ctio n 35 A.13 an d to th e vo lun teer fire fig h t r pre pare dn ess fun d cre ated in se ctio n lOO B .13.

IfA theperson rewho fundfiles dan ueindividual onor thea rejoint tincome rntax oreturn rwith ththe edepartment pof aymrevenue enunder tsection re422.13 mmay itteddesignate wone ithdollar tor emore reto turnbe ispaid injointly su ffic ien t to p ay the aveterans ddtrust itionfund alcreated amin ounsection t35A.13 deand sign ate d by th e ta xp ay er, the am ou nt d esig na t d sh all be redu ced to th e rem ainin g am o unt of refu nd or the remvolunteer ainingfire amfighter opreparedness untfund remcreated ittein dsection n100B.13. .

ThIf ethe drefund esigdue naon tionthe oreturn for athe copayment ntribremitted utiowith nthe unreturn deris thinsufficient isto wpay iththe additional amount designated by the retaxpayer, turthe seamount ctiodesignated nshall isbe irrevreduced oto cabthe le.remaining amount of refund or the remaining amount remitted with the return.

The designation of a contribution under this section is irrevocable.

TThe hedirector dof irerevenue ctoshall rdraft o f re ven ue sh a ll d raft the incincome omtax e ta x form to alloallow wthe thdesignation eof dcontributions esig na tion o f c on tribu tion s to the veveterans teratrust nsfund tru st fun d and to the vvolunteer olu nte er fire figfighter hpreparedness tfund ras preone parecheckoff dn ess fun d as on ethe c he cko ff o n th e tax rereturn. t rn .

The dedepartment partm ent of reverevenue, nu e, on oor rbefore beJanuary for31, eshall Jatransfer nuone-half ary 31 , s ha ll tra ns fer o ne -ha l of the tototal taamount ldesignated am o unt d esig na ted on the tatax xreturn retuforms rn form s due in the ppreceding rececalendar dinyear g ca len da r ye ar to the veveterans teratrust nsfund truand st fun d a nd the remremaining aone-half ining o ne -ha lf to the vvolunteer olu nte er fire figfighter hpreparedness terfund. pre pare dn ess fun d.

HHowever, owbefore ev er, b efor e a chcheckoff eckpursuant off pu rsu an t to ththis issection sshall ec to n sh al l be ppermitted, erm itte d, all lialiabilities b ilitie s on the bobooks okof sthe odepartment f th e d epa rtm en t of adadministrative mservices in istra tive se rvic es and acaccounts coidentified un ts id en tifie d as owowing ingunder undsection er8A.504 SAshall .504 sh a ll be sasatisfied. tisf ied .

se3. ctio n .

TThe hedepartment dof eprevenue artmshall enadopt trules oto fadminister revthis ensection. ue sh all ado pt rule s t a dm inister th is sec tio n.

T4. his se ctio n is s ub jec t to re pea l u nde r se ctio n 42 2.12 E.

SThis ec.section is subject to repeal under section 422.12E.

Sec.

SSection ec422.12H, toCode n2019, 42 2.12H , Co de 2 019 , is amamended en ded to read aas sfollows: fo llow s:

2.12H422.12H IIncome comtax echeckoff tfor xfish che cko ff fo r f ish and gamgame eprotection pfund. ro tectio n fun d.

id1. ua l or a join t in com e tax .

A peperson rsonwho wfiles hoan findividual ilesor a njoint inincome dtax ireturn rewith turnthe wdepartment ith th e d epa rtm en t of revrevenue enuunder esection u422.13 ndmay erdesignate s ec to n 42 2.13 m ay d esig na te a cocontribution n tribu tion to ththe estate statfish eand fgame ishprotection anfund dauthorized gapursuant me pr ote ctio n fun d au tho rized p urs uan t to sesection ctio456A.16. n 45 6A .16.

TThis hissection se ctio n is ssubject ub jec t to rerepeal peaunder lsection u422.12E. nde r se ctio n 42 2.12 E.

SSec. ec.

NEW SSECTION. EC TION .

42422.12I 2.12Income Itax Inccheckoff omfor ethe taIowa x c hec ko ff fo r th e Iow a state fafair irfoundation foufund. nd ation fun d.

HHouse oFile use779, Fp. il e 7 79 , p .

119 91. .

A pperson erswho onfiles w ho f ile s an indindividual iv id ua l or a jojoint inincome ttax increturn omwith ethe tadepartment x re tu rn w ith th e de pa rtm e nt of rerevenue veunder nusection e422.13 unmay ddesignate erone sedollar ctio n 42 2.1 3 m ay d es ign a te on e d o lla r or mmore o re to be ppaid aid to ththe efoundation fofund unof dthe atioIowa nstate fufair ndfoundation oas festablished th e Iow a s tat e fa ir fo u nd a to n a s es tab lis h ed in ssection ec173.22. tio n 1 73 .22 .

IIf f the rrefund efudue ndon duthe ereturn oor nthe thpayment eremitted rewith tuthe rnreturn o r th e p aym en t re m itted w ith th e ret ur n is ininsufficient sto upay ffic ie n t t o pa y the aamount mdesignated ouby nt d es ign a ted b y the taxtaxpayer pa ye r to ththe efoundation fofund, uthe ndamount atiodesignated nshall fube nreduced d, th e am o un t d es ign a ted s h all b e red uc ed to the remremaining aininamount gof amthe ourefund ntor othe fremaining thamount eremitted rewith futhe ndreturn. o r th e rem ain ing a m ou nt rem itte d w ith th e re tu rn .

TThe hedesignation d es ign a tio n of a ccontribution on tri bu tio n to the ffoundation oufund nunder dathis tionsection fun d u nd er th is sirrevocable. ec tio n is ir re vo c ab le .

TThe hedirector dof irerevenue cshall tordraft othe fincome revtax enform ue sh a ll d ra ft th e inc om e ta x fo rm to aallow llothe wdesignation th e d es ig na tio n of ccontributions o ntr ibu tio n s to ththe efoundation fofund uon ndthe atio n fu nd o n th e tax retreturn. ur n.

ThThe edepartment, deon pa rtm e n t, o n or bbefore efoJanuary re31, Jshall antransfer uathe rytotal 1,amount shdesignated aon ll tra n sfe r th e to ta l am o un t d esig n ate d o n the tatax xform fodue rm d ue in the ppreceding reyear ce din g y ea r to ththe efoundation fofund. un d atio n fu nd .

HHowever, obefore w eve r, b e for e a chcheckoff ecpursuant ko ff pu rs ua nt to tthis hisection sshall sebe ctiopermitted, nall shliabilities a ll b e p er m itte d , a ll li a b ilit ie s on ththe ebooks bof oothe ksdepartment oof fadministrative thservices eand daccounts epidentified artm en t o f a dm in istr ativ e s erv ic es a nd a cc ou n ts id en tif ied as oowing wunder isection g8A.504 ushall ndbe ersatisfied. s ec tio n S A .

043. s h all be s a tis fie d .

TThe heIowa Iostate wfair aboard smay taauthorize tepayment f air bo ard m ay a u tho riz e pa ym e nt from ththe efoundation fofund unfor dpurposes atio n fu nd f or p u rpo se s of susupporting pfoundation poactivities. rtin g fo u nd atio n a c tiv iti es .

TThe hedepartment dof eprevenue artmshall enadopt trules o f rev en ue s h a ll a do pt ru le s to imimplement plemthis entsection. th is s e ctio n .

se c tion 42 2.1 2E .

TThis hsection is sesubject ctio n i s su b jec t to rerepeal peunder asection l422.12E. u nd er D IV ISIO N IX POW E RS AN D D UT IES O F DIR EC TO R OF R EVE NU E S e c.

53DIVISION .IX POWERS AND DUTIES OF DIRECTOR OF REVENUE Sec.

S53. ec tio n 4 21 .17 , C o de 2 01 9, is am e nd ed by a dd ing the fo llo w in g new su b sec tio n :

NSection EW421.17, SCode UB2019, SEis Camended TIOby N.adding the following new subsection:

3NEW 5SUBSECTION .

To35. a ud it an d ex am in e a l l ta x es c o llec te d or a dm in ister ed b y th e de pa rtm e n t.

DTo IVISaudit IOand Nexamine Xall Staxes ALcollected ESor ANadministered Dby USthe Edepartment. TAX EX EM PT ION S RE LA TED TO M AN UF AC TUR ER S S e c.

54DIVISION .X SALES AND USE TAX EXEMPTIONS RELATED TO MANUFACTURERS Sec.

S54. ec tio n 4 23 .3, su b se ctio n 4 7, p ara gr ap h d , su b pa rag ra ph (4 ), su bp ara gr ap h di vis io n ( c) , u nn um b ere d p ara gr ap h 1 , C od e 20 19 , is am en de d to re ad a s fo llow s:

-MSection a423.3, nusubsection fa47, ctuparagraph rerd, -subparagraph do(4), essubparagraph ndivision ot(c), inunnumbered cluparagraph d1, eCode pe2019, rsois namended s wh o a re n o t co m m on ly u nd er sto od a s m a nu fa ctu re rs, in clu d ing bu t n o t lim ite d to Houseread Fas ilefollows: 779 , p .

20“Manufacturer” pdoes ersonot ninclude spersons pwho rimare anot rilycommonly engagedunderstood inas anymanufacturers, oincluding fbut thnot elimited followto ingHouse aFile c779, tp. i v i t i e s :

20 persons primarily engaged in any of the following activities:

TThis hisdivision dof ivthis isAct, io n o f th is A ct, being deemed oof fimmediate imimportance, mtakes ediateeffect im portance, ta k e s e f f e c t upon enactmenactment. ent.

This ddivision ivof isthis io n o f t h i s Act aapplies pretroactively p lie s r e tr o a c tiv e ly to May 30, 2018.

SSection e c tio n 422.10, susubsection b1, se c tio n 1 , paragraph aa, , subparagraph (1(1), ), subparagraph ddivision iv(a), is io n ( a ) , Code 2019, iis s amended to read as fofollows: llo w s:

(a) The bbusiness uis sin e ss i s engaged in ththe emanufacturing, mlife anufacturing,sciences, lagriscience, isoftware fengineering, e s c ie n c e s , a g ris c ie n c e , so ftw are e n g in e e rin g , or aaviation v ia tio n and aeroaerospace spindustry. ace in d u s try .

SSection e c tio n 422.10, susubsection b1, se c tio n 1 , paragraph aa, , subparagraph (1(1), ), subparagraph ddivision iv(b), is io n (b ), unnumbered paragraph 11, , Code 2019, iis s amended to read as fofollows: llo w s:

PPersons ersonsthat thshall a t s h a ll not be coconsidered n sid ered to be engaged in ththe emanufacturing, mlife anufacturing,sciences, lagriscience, isoftware fengineering, e s c ie n c e s , a g ris c ie n c e , so ftw are e n g in e e rin g , or aaviation v ia tio n and aeroaerospace spindustry, ace in d u s try , and ththus uare s a re not eeligible lfor ithe gcredit, iinclude bbut lare e fo r th e c r e din c lu d e b u t a re not limlimited ite d to aall lof lthe ofollowing: f th e fo llo w in g :

SSection e c tio n 422.33, susubsection b se c tio n 5, paragraph ee, , subparagraph (1(1), ), subparagraph ddivision iv(a), is io n ( a ) , Code 2019, iis s amended to read as fofollows: llo w s:

(a) The bbusiness uis sin e ss i s engaged in ththe emanufacturing, mlife anufacturing,sciences, lagriscience, isoftware fengineering, e s c ie n c e s , a g ris c ie n c e , so ftw are e n g in e e rin g , or aaviation v ia tio n and aeroaerospace spindustry. ace in d u s try .

SSection e c tio n 422.33, susubsection b se c tio n 5, paragraph ee, , subparagraph (1(1), ), subparagraph ddivision iv(b), is io n (b ), unnumbered paragraph -!1, , Code 2019, iis s amended to read as fofollows: llo w s:

PPersons ersonsthat thshall a t s h a ll not be coconsidered n sid ered to be engaged in ththe emanufacturing, mlife ansciences, uagriscience, factusoftware rinengineering, g , l i f e s c ie n c e s , a g ris c ie n c e , so ftw are e n g in e e rin g , or aaviation v ia tio n and aeroaerospace spindustry, ace in d u s try , and ththus uare s a re not eeligible lfor ithe gcredit, iinclude bbut lare e fo r th e c r e din c lu d e b u t a re not limlimited ite d to aall lof lthe ofollowing: f th e fo llo w in g :

SSection e c tio n 422.12A, susubsection b se c tio n 2, Code 2019, iis s amended to read as fofollows: llo w s:

House FFile ile779, 779p. , p .

21 .2.

The tataxes x e s imposed under tthis hdivision, iless sthe dcredits ivallowed is io n , le s s th e c r e d its allow ed under ssection e c tio n 422.12, sshall h a ll be reduced by an adadoption otax pcredit tioequal n ta x c r e d it eq u al to ththe e amount oof fqualified qadoption u a lif ie d ad o p tio n expenses ppaid a id or inincurred cby uthe rretaxpayer dduring bythe th e tax p ay er dttriH§ th e ta x year in coconnection nwith nthe ectioadoption nof w ith th e ad o p tio n o f a cchild h ild by ththe etaxpayer, ta x p a y e r, not to exceed fivfive e thousand ddollars oper llaadoption. r s p er ad o p tio n .

SSection e c tio n 422.12A, Code 2019, iis s amended by adding ththe efollowing follow ing new susubsection: b se c tio n :

NEW SUBSECTION.SUBSECTION .

The ccredit r e d it under tthis hsection iwith srespect s e c tio n w ith re sp e c t to any qqualified uadoption a lif ie d ad o p tio n expense sshall h a ll be allowallowed ed during a tatax xyear y ear as fofollows: llo w s:

For any qqualified uadoption a lif ie d ad o p tio n expense ppaid a id or inincurred cprior u rre d p r io r to oor rduring dthe utax rin g th e ta x year in which ththe eadoption ad o p tio n becomes ffinal, ithe n a l , th e tax yyear ear in which ththe eadoption ad o p tio n becomes ffinal. i n a l .

For any qqualified uadoption a lif ie d ad o p tio n expense ppaid aidor oincurred rafter inthe c u rre d a f t e r th e tax yyear ear in which ththe eadoption ad o p tio n becomes ffinal, ithe ntax a l , th e ta x year in which an adadoption o p tio n expense iis spaid por aidincurred. o r in c u rre d .

TThis hisdivision dof ivthis is io n o f t h i s Act aapplies pretroactively p lie s r e tr o a c tiv e ly to January 11, , 2019, fofor r tax yyears e a rs beginning on or aafter fthat tdate. e r th a t d a te .

DIVISION XXIII III UTILITY REPLACEMENT TASK FORCE Sec.

SSection e c tio n 437A.15, susubsection b se c tio n 7, paragraph bb, , Code 2019, iis s amended to read as fofollows: llo w s:

The tatask skforce foshall rcstudy ethe seffects hof athe llreplacement stutaxes d y th e e f f e c ts o f th e replacem ent ta x e s under tthis hchapter i s ch ap ter and cchapter h a p te r 437B on lolocal ctaxing aauthorities, llocal tataxing xdistricts, inconsumers, g a u th o r itie s , lo c a l ta x in g d i s t r i c t s , consum ers, and taxtaxpayers p ay ers through January 11, ,2019 ~ 2024.

IIf fthe thtask eforce ta sk fo rc e recommends mmodifications o d ific a tio n s to ththe ereplacement replacem ent tax ththat awill tfurther wthe ill fu rth e r th e purposes oof ftax taneutrality xfor nlocal etaxing uauthorities, trlocal ataxing litydistricts, fotaxpayers, r lo c a l ta x in g a u th o r itie s , lo c a l ta x in g d i s t r i c ta x p a y e rs, and consumconsumers, ers,consistent cwith othe nstated s is te n t w ith th e s ta te d purposes oof fthis thchapter, isthe cdepartment hof a p te r, th e departm ent o f management sshall htransmit athose ll tra n sm it th o se recommendations to ththe egeneral gassembly. e n e ra l assem bly.

DIVISION XIV FRANCHISE TAX ~—— ALTERNATIVE MINIMUM TAX (AMT) REPEAL Sec.

SSection e c tio n 422.60, susubsection b se c tio n 2, Code 2019, iis s amended by adding ththe efollowing fo llo w in g new pparagraph: arag rap h :

NEW PARAGRAPH.PARAGRAPH .

TThis hissubsection suis brepealed se c tio n i s rep ealed January 11, , 2021, fofor rtax tayears x y ears beginning on or aafter fthat tdate. e r th a t d a te .

House FiFile l779, ep. 779 , p .

22 SecSec. .

6666. .

SSection e422.60, csubsection tio3, nCode 4222019, .is amended to read as follows:

60 , su b se c tio n 3, Code 2019, i s amended to read as fo llo w s:

(1) ~hereThere For tax yyears e a rs beginning bbefore e fo re January 11, , 2022, ththere eis reallowed i s allow ed as a ccredit ragainst ethe dtax itdetermined a g a in ssection t th e ta x determ ined in s e c tio n 422.63 fofor r a tatax x year an amount eqequal u al to ththe e minimum tatax xcredit cfor rthat etax dyear. it fo r th a t ta x y e a r.

(2) The minimum tatax xcredit cfor r e d it fo r a tatax x year iis sthe thexcess, eif e x c e ss, i f any, oof fthe thnet e n e t minimum tatax x imposed fofor rall aprior ltax lyears p r io r ta x y e a rs beginning on or aafter f t e r January 11, , 1987, bbut ubefore t b e fo re January ,1, 2021, over ththe e amount alloallowable w ab le as a ccredit r e d it under tthis hsubsection ifor sthose suprior btax seyears. c tio n fo r th o se p r io r ta x y e a rs .

bb. .

(1) The allowallowable ablecredit cred it under paragraph ''aN“a” for a tax year beginning bbefore e fo re January 11, , 2021, sshall h a ll not exceed ththe eexcess, eif x c e ss, i f any, oof fthe thtax edetermined ta x determ ined in ssection e c tio n 422.63 over ththe estate salternative t a t e a lte r n a tiv e minimum tatax x as determdetermined ined in susubsection b se c tio n 2.

The alloallowable wcredit ab le c r e d it under pparagraph arag“a” rapfor h 'an fo r a tatax x year beginning in ththe e 2021 calencalendar d ar year sshall h a ll not exceed ththe etax tadetermined x determ ined in ssection e c tio n 422.63.

(2) The nnet et minimum tatax xfor fo r a tatax x year iis sthe thexcess, eif e x c e ss, i f any, oof fthe th e tax determdetermined ined in susubsection b se c tio n 2 fofor rthe thtax e ta x year over ththe etax tadetermined x determ ined in ssection e c tio n 422.63 fofor rthe thtax eyear. ta x y e a r.

TThis hissubsection suis brepealed se c tio n i s re p e a le d January 11, , 2022, fofor r tax yyears e a rs beginning on or aafter fthat tdate. e r th a t d a te .

422.12N Geothermal hheat eat pump tax ccredit. r e d it.

The1. ta x e s imposed under t h i s d iv is io n , le s s th e c r e d its allow ed under s e c tio n 422.12, s h a ll be reduced by a geotherm al h e a t pump ta x c r e d it eq u al to tw enty p e rc e n t o f th e fe d e ra l r e s id e n tia l energy e f f i c i e n t p ro p e rty ta x c r e d it allow ed fo r geotherm al h eat pumps provided in s e c tio n 25D (a)(5) o f th e I n te r n a l Revenue Code fo r r e s id e n tia l p ro p e rty lo c a te d in Iowa .

The taxes imposed under this division, less the credits allowed under section 422.12, shall be reduced by a geothermal heat pump tax credit equal to twenty percent of the federal residential energy efficient property tax credit allowed for geothermal heat pumps provided in section 25D(a)(5) of the Internal Revenue Code for residential property located in Iowa.

Any ccredit r e d it in exexcess cessof othe ftax thliability eis ta x l i a b i l i t i s not refurefundable nbut dthe ab le b u t th e excess fofor rthe thtax e ta x year may be ccredited re d ite d to ththe etax taliability xfor lthe ifollowing aten byears i l i t y fo r th e follow ing te n y e a rs or uuntil ndepleted, twhichever iis learlier. d e p le te d , w hichever i s e a r l i e r .

The departmdepartment entshall saccept h a ll accep t and approve aapplications p p lic a tio n s on a firsfirst-come, t-cfirst-served obasis muntil ethe , f ir s t- s e r v e d b a s is u n t i l th e maximum amount House FFile ile779, 779p. , p .

23 oof ftax tacredits xthat c r e d its th a t may be claimclaimed edpursuant p u rsu an t to susubsection b se c tio n 4 iis s reached.

IIf ffor fo r a tatax x year ththe eaggregate ag g reg ate amount oof ftax tacredits xapplied cfor r e d its a p p lie d fo r exceeds ththe e amount sspecified p e c ifie d in susubsection b se c tio n 4, ththe edepartment departmshall entestablish s h a llwait elist sfor ta b lis h a w ait l i s t fo r tax ccredits. r e d i t s .

VValid alidapplications afiled p p lic a tio n s f i l e d by ththe e taxpayer by May 1 followfollowing ingthe th e year oof fthe thinstallation ebut i n s t a l l a t i o n b u t not approved by ththe edepartment departmshall ent s h a ll be pplaced laced on a wwait aitlist l i s t in ththe eorder othe rdapplications e r th e a p p lic a tio n s were rereceived c e iv e d and ththose oapplicants seshall a p p lic a n ts s h a ll be given ppriority rfor i o r i t y fo r having ththeir eapplications ir a p p lic a tio n s approved in succeeding yyears. e a rs .

PlacemPlacement ent on a wwait aitlist lpursuant i s t p u rsu an t to tthis hsubsection ishall s su b se c tio n s h a ll not cconstitute o n s titu te a prompromise ise binding ththe estate. s t a t e .

The aavailability vof a itax lcredit a b i l i t y o f a ta x c r e d it and apapproval pof ro v al o f a tatax xcredit capplication rpursuant e d it a p p lic a tio n p u rsu an t to tthis hsection i s s e c tio n in a fufuture tu re year iis scontingent c o n tin g e n t upon ththe eavailability aof vtax acredits i l a b i l i t y o f ta x c r e d its in ththat aparticular tyear. p a r tic u la r y e a r.

The cumcumulative ulativevalue vof alu e o f tax ccredits rclaimed eannually d its claim ed an n u ally by aapplicants ppursuant p lic a n ts p u rsu an t to tthis hsection ishall s s e c tio n s h a ll not exceed one mmillion illiodollars. n d o lla r s .

IIf f an amount of tatax xcredits cavailable rfor e d its a vtax a ila b le fo r a ta x year ppursuant u rsu an t to paragraph ~a-“a” goes unclaimunclaimed, ed,the th e amount oof fthe thunclaimed etax unclaimcredits edshall ta x c r e d its s h a ll be made aavailable vfor athe ilafollowing btax le fo r th e fo llo w in g ta x year in aaddition dto, d itio n to , and cumcumulated ulatedwith, wthe ith , th e amount aavailable vpursuant a ila b le p u rsu an t to pparagraph arag“a” rapfor h~a-the fofollowing rtax thyear. e follow ing ta x y e a r.

The ddirector ir e c to r of revenue sshall h a ll adopt rurules le s to implement tthis hsection. i s s e c tio n .

TThis hisdivision dof ivthis isAct, io n o f th is A ct, being deemed oof fimmediate imimportance, mtakes ediateeffect im portance, ta k e s e f f e c t upon enactmenactment. ent.

TThis hisdivision dof ivthis is io n o f t h i s Act aapplies pretroactively p lie s r e tr o a c tiv e ly to January 11, , 2019, fofor r tax yyears e a rs beginning on or aafter fthat tdate. e r th a t d a te .

SSection e c tio n 533.329, susubsection b se c tio n 2, paragraph aa, , Code 2019, iis s amended to read as fofollows: llo w s:

The moneys and ccredits rtax e d its ta x on sstate tcredit a t e c r e d it unions iis s imposed aat t a rrate aof teone-half ocent f o n e -h a lf c e n t on each ddollar o lla r of ththe elegal le g a l and sspecial preserves ethat care iarequired l re se rv e s th a t a re re q u ire d to be mmaintained aintained by ththe estate scredit t a t e c r e d it union under ssection e c tio n 533.303, aadand sshall h a ll be lelevied v ie d by ththe eboard beardof esupervisors fand suplaced pupon ethe rvtax isolist rsand aad p laced upea th e ta x l i s t aad House FFile ile779, 779p. , p .

24 collectedbycollected theby couHty treasurer However, an exemption sh all be sta te c re d it union in the amountcounty oftreasurer. forty ~CHARLES SCHNEIDER President of the Senate I hereby c e rtify that th is b i l l originated in the House and i s known as House F ile E79i g h t y - e ~ l ~ CARMINE BOAL Chief Clerk of the House ApprovedM ~ (,"" , 2019 K ~ Governor

However, an exemption shall be given to each state credit union in the amount of forty thousand dollars.

______________________________ ______________________________ LINDA UPMEYER CHARLES SCHNEIDER Speaker of the House President of the Senate I hereby certify that this bill originated in the House and is known as House File 779, Eighty-eighth General Assembly.

______________________________ CARMINE BOAL Chief Clerk of the House Approved _______________, 2019 ______________________________ KIM REYNOLDS Governor