Text: SSB3044            Text: SSB3046


Senate Study Bill 3045

SENATE/HOUSE FILE BY (PROPOSED DEPARTMENT OF REVENUE BILL) A BILL FOR 1 An Act relating to the administration of the streamlined sales 2 tax agreement by the department of revenue. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 5302DP (3) 84 mm/sc PAG LIN 1 1 Section 1. Section 423.1, subsection 51, paragraph a, 1 2 subparagraph (2), Code Supplement 2011, is amended to read as 1 3 follows: 1 4 (2) The cost of materials used, labor or service cost, 1 5 interest, losses, all costs of transportation to the seller, 1 6 all taxes imposed on the seller except as provided in paragraph 1 7 "b", subparagraphs (5) and (6), and any other expenses of the 1 8 seller. 1 9 Sec. 2. Section 423.1, subsection 51, paragraph b, Code 1 10 Supplement 2011, is amended by adding the following new 1 11 subparagraphs: 1 12 NEW SUBPARAGRAPH. (5) Any state or local tax on a retail 1 13 sale that is imposed on the seller if the statute, rule, or 1 14 local ordinance imposing the tax provides that the seller may, 1 15 but is not required to, collect such tax from the consumer, and 1 16 if the tax is separately stated on the invoice, bill of sale, 1 17 or similar document given to the purchaser. 1 18 NEW SUBPARAGRAPH. (6) Any tribal tax on a retail sale that 1 19 is imposed on the seller if the tribal law imposing the tax 1 20 provides that the seller may but is not required to collect 1 21 such tax from the consumer, and if the tax is separately stated 1 22 on the invoice, bill of sale, or similar document given to the 1 23 purchaser. 1 24 Sec. 3. Section 423.1, subsection 51, Code Supplement 2011, 1 25 is amended by adding the following new paragraph: 1 26 NEW PARAGRAPH. 0d. "Sales price" shall include 1 27 consideration received by the seller from third parties if all 1 28 of the following apply: 1 29 (1) The seller actually receives consideration from a party 1 30 other than the purchaser and the consideration is directly 1 31 related to a price reduction or discount on the sale. 1 32 (2) The seller has an obligation to pass the price reduction 1 33 or discount through to the purchaser. 1 34 (3) The amount of the consideration attributable to the sale 1 35 is fixed and determinable by the seller at the time of the sale 2 1 of the item to the purchaser. 2 2 (4) One of the following criteria is met: 2 3 (a) The purchaser presents a coupon, certificate, or other 2 4 documentation to the seller to claim a price reduction or 2 5 discount where the coupon, certificate, or documentation is 2 6 authorized, distributed, or granted by a third party with the 2 7 understanding that the third party will reimburse any seller to 2 8 whom the coupon, certificate, or documentation is presented. 2 9 (b) The purchaser is identified to the seller as a member 2 10 of a group or organization entitled to a price reduction or 2 11 discount. For purposes of this subparagraph division, a card 2 12 identifying the holder as a preferred customer, which card is 2 13 available to any patron, does not constitute membership in such 2 14 a group or organization. 2 15 (c) The price reduction or discount is identified as 2 16 a third=party price reduction or discount on the invoice 2 17 received by the purchaser or on a coupon, certificate, or other 2 18 documentation presented by the purchaser. 2 19 Sec. 4. Section 423.31, Code 2011, is amended by adding the 2 20 following new subsection: 2 21 NEW SUBSECTION. 8. Persons required to file a return under 2 22 this section may instead file a simplified electronic return 2 23 pursuant to section 423.49. 2 24 Sec. 5. Section 423.49, subsection 4, paragraph d, Code 2 25 2011, is amended to read as follows: 2 26 d. A model 4 seller, or a seller not registered under the 2 27 agreement who is otherwise registered in the state, may elect 2 28 to file a simplified return. Model 4 sellers, or sellers not 2 29 registered under the agreement who are otherwise registered in 2 30 the state, electing to do so shall file the first part of the 2 31 return each month. 2 32 Sec. 6. Section 423.49, subsection 4, paragraph e, 2 33 unnumbered paragraph 1, Code 2011, is amended to read as 2 34 follows: 2 35 A model 4 seller required to register in the state, or a 3 1 seller not registered under the agreement who is otherwise 3 2 registered in the state, may submit the information collected 3 3 in the second part of the return in one of the following ways: 3 4 Sec. 7. Section 423.52, subsection 1, Code 2011, is amended 3 5 to read as follows: 3 6 1. Sellers and certified service providers using 3 7 databases derived from zip codes or state or vendor provided 3 8 address=based databases are relieved from liability to this 3 9 state or its local taxing jurisdictions for having charged and 3 10 collected the incorrect amount of sales or use tax resulting 3 11 from the seller or certified service provider relying on 3 12 erroneous data provided by this state on tax rates, boundaries, 3 13 or taxing jurisdiction assignments. If this state provides an 3 14 address=based system for assigning taxing jurisdictions, the 3 15 director is not required to provide liability relief for errors 3 16 resulting from reliance on the information a database derived 3 17 from zip codes and provided by this state if the director has 3 18 given adequate notice, as determined by the governing board, to 3 19 affected parties of the decision to end this relief. 3 20 EXPLANATION 3 21 This bill relates to the administration of the sales and use 3 22 taxes under the streamlined sales tax agreement. 3 23 Iowa is a member of the streamlined sales and use tax 3 24 agreement, which is an effort to administer state sales and 3 25 use taxes in all participating states according to the same 3 26 simplified system. Under the agreement, Iowa must periodically 3 27 make changes in the administration of the sales and use taxes 3 28 in order to remain in compliance. 3 29 The bill amends the definition of "sales price" to exclude 3 30 any state or local tax on a retail sale that is imposed on the 3 31 seller if by law the seller may but is not required to collect 3 32 the tax from the consumer, and if the tax is separately stated 3 33 on the invoice, bill of sale, or similar document given to the 3 34 purchaser. 3 35 The bill further amends the definition of "sales price" to 4 1 exclude any tribal tax on a retail sale that is imposed on the 4 2 seller if by law the seller may but is not required to collect 4 3 such tax from the consumer, and if the tax is separately stated 4 4 on the invoice, bill of sale, or similar document given to the 4 5 purchaser. 4 6 The bill also amends the definition of "sales price" to 4 7 include consideration received from third parties if four 4 8 criteria are met. First, the seller must actually receive 4 9 consideration from a party other than the purchaser and the 4 10 consideration must be directly related to a price reduction 4 11 or discount on the sale. Second, the seller must have an 4 12 obligation to pass the price reduction or discount through 4 13 to the purchaser. Third, the amount of the consideration 4 14 attributable to the sale must be fixed and determinable by the 4 15 seller at the time of the sale. Fourth, one of the following 4 16 must apply: the purchaser presents to the seller a coupon, 4 17 certificate, or other documentation acquired from a third party 4 18 to claim a discount; the purchaser is identified to the seller 4 19 as a member of a group or organization entitled to claim a 4 20 price reduction or discount; or the price reduction or discount 4 21 is identified as a third=party price reduction or discount 4 22 on the invoice received by the purchaser or on a coupon, 4 23 certificate, or other documentation presented by the purchaser. 4 24 The bill allows sellers that have not registered under the 4 25 streamlined sales and use tax agreement but that are otherwise 4 26 registered in the state and required to file sales tax returns 4 27 to elect to file using the simplified electronic return. 4 28 The bill amends Code section 423.52 relating to liability 4 29 relief for sellers and certified service providers. Under 4 30 current law, relief from liability is granted to sellers and 4 31 certified service providers who charge incorrect sales and 4 32 use tax after relying on erroneous tax rate, boundary, or 4 33 jurisdiction data provided by the state in databases derived 4 34 from zip codes or addresses. However, the state may deny 4 35 liability relief to a seller or certified service provider for 5 1 reliance on either database as long as the state maintains an 5 2 address=based system for assigning taxing jurisdictions, and 5 3 provides adequate notice to the affected parties. The bill 5 4 provides that if the state maintains an address=based system 5 5 for assigning taxing jurisdictions, it may only deny liability 5 6 relief to sellers and certified service providers for errors 5 7 resulting from the seller's or certified service provider's 5 8 reliance on a database derived from zip codes. LSB 5302DP (3) 84 mm/sc
Text: SSB3044            Text: SSB3046