Text: SF2329            Text: SF2331
Complete Bill History


Senate File 2330

SENATE FILE BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SF 2309) (SUCCESSOR TO SSB 3178) A BILL FOR 1 An Act relating to retailers maintaining a place of business 2 in this state for purposes of the collection of sales and 3 use taxes, agreements relating to the collection of sales 4 and use taxes in the state, and sales of tangible personal 5 property and services to the state. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 5408SZ (3) 84 mm/sc PAG LIN 1 1 Section 1. Section 423.1, subsection 47, Code Supplement 1 2 2011, is amended to read as follows: 1 3 47. "Retailer" means and includes every person engaged in 1 4 the business of selling tangible personal property or taxable 1 5 services at retail, or the furnishing of gas, electricity, 1 6 water, or communication service, and tickets or admissions 1 7 to places of amusement and athletic events or operating 1 8 amusement devices or other forms of commercial amusement from 1 9 which revenues are derived and includes but is not limited to 1 10 every retailer maintaining a place of business in this state. 1 11 However, when in the opinion of the director it is necessary 1 12 for the efficient administration of this chapter to regard 1 13 any salespersons, representatives, truckers, peddlers, or 1 14 canvassers as agents of the dealers, distributors, supervisors, 1 15 employers, or persons under whom they operate or from whom they 1 16 obtain tangible personal property sold by them irrespective of 1 17 whether or not they are making sales on their own behalf or on 1 18 behalf of such dealers, distributors, supervisors, employers, 1 19 or persons, the director may so regard them, and may regard 1 20 such dealers, distributors, supervisors, employers, or persons 1 21 as retailers for the purposes of this chapter. "Retailer" 1 22 includes a seller obligated to collect sales or use tax. 1 23 Sec. 2. Section 423.1, subsection 48, Code Supplement 2011, 1 24 is amended to read as follows: 1 25 48. a. "Retailer maintaining a place of business in this 1 26 state" or any like term includes any retailer having or 1 27 maintaining within this state, directly or by a subsidiary, 1 28 an office, distribution house, sales house, warehouse, or 1 29 other place of business, or any representative operating 1 30 within this state under the authority of the retailer or its 1 31 subsidiary, irrespective of whether that place of business or 1 32 representative is located here permanently or temporarily, or 1 33 whether the retailer or subsidiary is admitted to do business 1 34 within this state pursuant to chapter 490. 1 35 b. (1) A retailer shall be presumed to be maintaining a 2 1 place of business in this state, as defined in paragraph "a", if 2 2 any person that has substantial nexus in this state, other than 2 3 a person acting in its capacity as a common carrier, does any 2 4 of the following: 2 5 (a) Sells a similar line of products as the retailer and 2 6 does so under the same or similar business name. 2 7 (b) Maintains an office, distribution facility, warehouse, 2 8 storage place, or similar place of business in this state to 2 9 facilitate the delivery of property or services sold by the 2 10 retailer to the retailer's customers. 2 11 (c) Uses trademarks, service marks, or trade names in this 2 12 state that are the same or substantially similar to those used 2 13 by the retailer. 2 14 (d) Delivers, installs, assembles, or performs maintenance 2 15 services for the retailer's customers. 2 16 (e) Facilitates the retailer's delivery of property to 2 17 customers in this state by allowing the retailer's customers to 2 18 take delivery of property sold by the retailer at an office, 2 19 distribution facility, warehouse, storage place, or similar 2 20 place of business maintained by the person in this state. 2 21 (f) Conducts any other activities in this state that 2 22 are significantly associated with the retailer's ability 2 23 to establish and maintain a market in this state for the 2 24 retailer's sales. 2 25 (2) The presumption established in this paragraph may be 2 26 rebutted by a showing of proof that the person's activities in 2 27 this state are not significantly associated with the retailer's 2 28 ability to establish or maintain a market in this state for the 2 29 retailer's sales. 2 30 Sec. 3. NEW SECTION. 423.13A Administration == 2 31 effectiveness of agreements with retailers. 2 32 1. Notwithstanding any provision of this chapter to the 2 33 contrary, any ruling, agreement, or contract, whether written 2 34 or oral, express or implied, entered into after the effective 2 35 date of this Act between a retailer and a state agency which 3 1 provides that a retailer is not required to collect sales and 3 2 use tax in this state despite the presence in this state of 3 3 a warehouse, distribution center, or fulfillment center that 3 4 is owned and operated by the retailer or an affiliate of the 3 5 retailer shall be null and void unless such ruling, agreement, 3 6 or contract is approved by a majority vote of both houses of 3 7 the general assembly. 3 8 2. For purposes of this section, "state agency" means 3 9 the executive branch, including any executive department, 3 10 commission, board, institution, division, bureau, office, 3 11 agency, or other entity of state government. "State agency" 3 12 does not mean the general assembly, or the judicial branch as 3 13 provided in section 602.1102. 3 14 Sec. 4. Section 423.36, Code 2011, is amended by adding the 3 15 following new subsection: 3 16 NEW SUBSECTION. 1A. a. Notwithstanding subsection 1, 3 17 if any person will make taxable sales of tangible personal 3 18 property or furnish services to any state agency, that person 3 19 shall, prior to the sale, apply for and receive a permit 3 20 to collect sales or use tax pursuant to this section. A 3 21 state agency shall not purchase tangible personal property 3 22 or services from any person unless that person has a valid, 3 23 unexpired permit issued pursuant to this section and is in 3 24 compliance with all other requirements in this chapter imposed 3 25 upon retailers, including but not limited to the requirement to 3 26 collect and remit sales and use tax and file sales tax returns. 3 27 b. For purposes of this subsection, "state agency" means 3 28 any executive, judicial, or legislative department, commission, 3 29 board, institution, division, bureau, office, agency, or other 3 30 entity of state government. 3 31 EXPLANATION 3 32 This bill relates to the collection of sales and use taxes 3 33 by retailers maintaining a place of business in this state, 3 34 agreements relating to the collection of sales and use taxes, 3 35 and sales of tangible personal property and services to state 4 1 agencies. 4 2 A retailer located in this state, or maintaining a place of 4 3 business in this state, must collect and remit sales and use 4 4 taxes to the department of revenue. Currently, as defined in 4 5 Code section 423.1, the term "retailer maintaining a place of 4 6 business in this state" includes certain places of business, 4 7 and representatives operating under the authority of the 4 8 retailer. 4 9 The bill provides that a retailer will be presumed to be 4 10 maintaining a place of business in this state if any person 4 11 that has substantial nexus in this state, other than a common 4 12 carrier, engages in any of six activities specified in the 4 13 bill. The presumption may be rebutted by a showing of proof 4 14 that the person's activities are not significantly associated 4 15 with the retailer's ability to establish or maintain a market 4 16 in this state for the retailer's sales. 4 17 The bill amends the definition of "retailer" in Code section 4 18 423.1 to specify that it includes a retailer maintaining a 4 19 place of business in this state. 4 20 The bill provides that any ruling, agreement, or contract 4 21 entered into after the effective date of the bill between a 4 22 retailer and a state agency which provides that a retailer is 4 23 not required to collect sales and use tax in this state despite 4 24 the presence in this state of a warehouse, distribution center, 4 25 or fulfillment center owned and operated by the retailer or 4 26 an affiliate shall be null and void unless it is specifically 4 27 approved by a majority vote of both houses of the general 4 28 assembly. For purposes of this provision of the bill, "state 4 29 agency" does not include the general assembly or the judicial 4 30 branch. 4 31 The bill provides that no person shall make taxable sales or 4 32 furnish taxable services to a state agency unless that person 4 33 obtains a sales tax permit. Also, the state is prohibited 4 34 from purchasing taxable property or services from any person 4 35 unless that person has a valid, unexpired sales tax permit and 5 1 is in compliance with all other sales tax laws imposed upon 5 2 retailers. For purposes of this provision of the bill, "state 5 3 agency" includes the executive branch, the general assembly, 5 4 and the judicial branch. LSB 5408SZ (3) 84 mm/sc
Text: SF2329            Text: SF2331 Complete Bill History