Iowa Code 423

CHAPTER 423 STREAMLINED SALES AND USE TAX ACT
Refunds to governmental bodies, § 423.4
Former ch 423 repealed and new provisions governing sales and use tax enacted effective July 1, 2004; see 2003 Acts, 1st Ex, ch 2, §94==151, 205 Sales and use tax industrial processing exemption study; annual reports through January 1, 2013; 2005 Acts, ch 77, §1, 2

423.1 DEFINITIONS.
423.2 TAX IMPOSED.
423.3 EXEMPTIONS.
423.4 REFUNDS.
423.5 IMPOSITION OF TAX.
423.6 EXEMPTIONS.
423.7 TITLE.
423.7A MOTOR VEHICLE LEASE TAX.
423.8 LEGISLATIVE FINDING AND INTENT.
423.9 AUTHORITY TO ENTER AGREEMENT -- REPRESENTATIVES ON GOVERNING BOARD.
423.9A IOWA STREAMLINED SALES TAX ADVISORY COUNCIL.
423.10 RELATIONSHIP TO STATE LAW.
423.11 AGREEMENT REQUIREMENTS.
423.12 LIMITED BINDING AND BENEFICIAL EFFECT.
423.13 PURPOSE OF THIS SUBCHAPTER.
423.14 SALES AND USE TAX COLLECTION.
423.15 GENERAL SOURCING RULES.
423.16 TRANSACTIONS TO WHICH THE GENERAL SOURCING RULES DO NOT APPLY.
423.17 SOURCING RULES FOR VARIOUS TYPES OF LEASED OR RENTED EQUIPMENT WHICH IS NOT TRANSPORTATION EQUIPMENT.
423.18 MULTIPLE POINTS OF USE EXEMPTION FORMS.
423.19 DIRECT MAIL SOURCING.
423.20 TELECOMMUNICATIONS SERVICE SOURCING.
423.21 BAD DEBT DEDUCTIONS.
423.22 TAXATION IN ANOTHER STATE.
423.23 SELLERS' AGREEMENTS.
423.24 ABSORBING TAX PROHIBITED.
423.24A REIMBURSEMENT FOR THE PRIMARY ROAD FUND.
423.25 DIRECTOR'S POWER TO ADOPT RULES.
423.27 MOTOR VEHICLE LEASE TAX.
423.28 SALES TAX REPORT -- DEDUCTION.
423.29 COLLECTIONS BY SELLERS.
423.30 FOREIGN SELLERS NOT REGISTERED UNDER THE AGREEMENT.
423.31 FILING OF SALES TAX RETURNS AND PAYMENT OF SALES TAX.
423.32 FILING OF USE TAX RETURNS AND PAYMENT OF USE TAX.
423.33 LIABILITY OF PERSONS OTHER THAN RETAILERS FOR PAYMENT OF SALES OR USE TAX.
423.34 LIABILITY OF USER.
423.34A EXCLUSION FROM LIABILITY FOR PURCHASERS.
423.35 POSTING OF BOND TO SECURE PAYMENT.
423.36 PERMITS REQUIRED TO COLLECT SALES OR USE TAX -- APPLICATIONS -- REVOCATION.
423.37 FAILURE TO FILE SALES OR USE TAX RETURNS -- INCORRECT RETURNS.
423.38 JUDICIAL REVIEW.
423.39 SERVICE OF NOTICES.
423.40 PENALTIES -- OFFENSES -- LIMITATION.
423.41 BOOKS -- EXAMINATION.
423.42 STATUTES APPLICABLE.
423.43 DEPOSIT OF REVENUES.
423.44 REIMBURSEMENT FOR PRIMARY ROAD FUND.
423.45 REFUNDS -- EXEMPTION CERTIFICATES.
423.46 RATE AND BASE CHANGES.
423.47 REFUNDS AND CREDITS.
423.48 RESPONSIBILITIES AND RIGHTS OF SELLERS REGISTERED UNDER THE AGREEMENT.
423.49 RETURNS.
423.50 REMITTANCE OF FUNDS.
423.51 ADMINISTRATION OF EXEMPTIONS.
423.52 RELIEF FROM LIABILITY FOR SELLERS AND CERTIFIED SERVICE PROVIDERS.
423.53 BAD DEBTS AND MODEL 1 SELLERS.
423.54 AMNESTY FOR REGISTERED SELLERS.
423.55 DATABASES.
423.56 CONFIDENTIALITY AND PRIVACY PROTECTIONS UNDER MODEL 1.
423.57 STATUTES APPLICABLE.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, § 94, 205; 2004 Acts, ch 1073, § 22, 23;
      2005 Acts, ch 140, §3, 4, 42; 2006 Acts, ch 1030, §39; 2007 Acts, ch
      179, §1
         Referred to in § 321.105A, 422.7, 423.2, 423.3, 423.5, 423.45,
      423A.2, 423B.6, 423B.10, 423C.2, 423D.1

Footnotes

         Former § 423.1 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, § 151, 205
        423.2  TAX IMPOSED.
         1.  There is imposed a tax of six percent upon the sales price of
      all sales of tangible personal property, consisting of goods, wares,
      or merchandise, sold at retail in the state to consumers or users
      except as otherwise provided in this subchapter.
         a.  For the purposes of this subchapter, sales of the
      following services are treated as if they were sales of tangible
      personal property:
         (1)  Sales of engraving, photography, retouching, printing, and
      binding services.
         (2)  Sales of vulcanizing, recapping, and retreading services.
         (3)  Sales of prepaid telephone calling cards and prepaid
      authorization numbers.
         (4)  Sales of optional service or warranty contracts, except
      residential service contracts regulated under chapter 523C, which
      provide for the furnishing of labor and materials and require the
      furnishing of any taxable service enumerated under this section.  The
      sales price is subject to tax even if some of the services furnished
      are not enumerated under this section.  Additional sales, services,
      or use taxes shall not be levied on services, parts, or labor
      provided under optional service or warranty contracts which are
      subject to tax under this subsection.
         If the optional service or warranty contract is a computer
      software maintenance or support service contract and there is no
      separately stated fee for the taxable personal property or for the
      nontaxable service, the tax imposed by this subsection shall be
      imposed on fifty percent of the sales price from the sale of such
      contract.  If the contract provides for technical support services
      only, no tax shall be imposed under this subsection.  The provisions
      of this subparagraph (4) also apply to the use tax.
         b.  Sales of building materials, supplies, and equipment to
      owners, contractors, subcontractors, or builders for the erection of
      buildings or the alteration, repair, or improvement of real property
      are retail sales of tangible personal property in whatever quantity
      sold.  Where the owner, contractor, subcontractor, or builder is also
      a retailer holding a retail sales tax permit and transacting retail
      sales of building materials, supplies, and equipment, the person
      shall purchase such items of tangible personal property without
      liability for the tax if such property will be subject to the tax at
      the time of resale or at the time it is withdrawn from inventory for
      construction purposes.  The sales tax shall be due in the reporting
      period when the materials, supplies, and equipment are withdrawn from
      inventory for construction purposes or when sold at retail.  The tax
      shall not be due when materials are withdrawn from inventory for use
      in construction outside of Iowa and the tax shall not apply to
      tangible personal property purchased and consumed by the manufacturer
      as building materials in the performance by the manufacturer or its
      subcontractor of construction outside of Iowa.  The sale of carpeting
      is not a sale of building materials.  The sale of carpeting to
      owners, contractors, subcontractors, or builders shall be treated as
      the sale of ordinary tangible personal property and subject to the
      tax imposed under this subsection and the use tax.
         c.  The use within this state of tangible personal property by
      the manufacturer thereof, as building materials, supplies, or
      equipment, in the performance of construction contracts in Iowa,
      shall, for the purpose of this subchapter, be construed as a sale at
      retail of tangible personal property by the manufacturer who shall be
      deemed to be the consumer of such tangible personal property.  The
      tax shall be computed upon the cost to the manufacturer of the
      fabrication or production of the tangible personal property.
         2.  A tax of six percent is imposed upon the sales price of the
      sale or furnishing of gas, electricity, water, heat, pay television
      service, and communication service, including the sales price from
      such sales by any municipal corporation or joint water utility
      furnishing gas, electricity, water, heat, pay television service, and
      communication service to the public in its proprietary capacity,
      except as otherwise provided in this subchapter, when sold at retail
      in the state to consumers or users.
         3.  A tax of six percent is imposed upon the sales price of all
      sales of tickets or admissions to places of amusement, fairs, and
      athletic events except those of elementary and secondary educational
      institutions.  A tax of six percent is imposed on the sales price of
      an entry fee or like charge imposed solely for the privilege of
      participating in an activity at a place of amusement, fair, or
      athletic event unless the sales price of tickets or admissions
      charges for observing the same activity are taxable under this
      subchapter.  A tax of six percent is imposed upon that part of
      private club membership fees or charges paid for the privilege of
      participating in any athletic sports provided club members.
         4. a.  A tax of six percent is imposed upon the sales price
      derived from the operation of all forms of amusement devices and
      games of skill, games of chance, raffles, and bingo games as defined
      in chapter 99B, and card game tournaments conducted under section
      99B.7B, that are operated or conducted within the state, the tax to
      be collected from the operator in the same manner as for the
      collection of taxes upon the sales price of tickets or admission as
      provided in this section.  Nothing in this subsection shall legalize
      any games of skill or chance or slot-operated devices which are now
      prohibited by law.
         b.  The tax imposed under this subsection covers the total
      amount from the operation of games of skill, games of chance,
      raffles, and bingo games as defined in chapter 99B, card game
      tournaments conducted under section 99B.7B, and musical devices,
      weighing machines, shooting galleries, billiard and pool tables,
      bowling alleys, pinball machines, slot-operated devices selling
      merchandise not subject to the general sales taxes and on the total
      amount from devices or systems where prizes are in any manner awarded
      to patrons and upon the receipts from fees charged for participation
      in any game or other form of amusement, and generally upon the sales
      price from any source of amusement operated for profit, not specified
      in this section, and upon the sales price from which tax is not
      collected for tickets or admission, but tax shall not be imposed upon
      any activity exempt from sales tax under section 423.3, subsection
      78.  Every person receiving any sales price from the sources
      described in this section is subject to all provisions of this
      subchapter relating to retail sales tax and other provisions of this
      chapter as applicable.
         5.  There is imposed a tax of six percent upon the sales price
      from the furnishing of services as defined in section 423.1.
         6.  The sales price of any of the following enumerated services is
      subject to the tax imposed by subsection 5:  alteration and garment
      repair; armored car; vehicle repair; battery, tire, and allied;
      investment counseling; service charges of all financial institutions;
      barber and beauty; boat repair; vehicle wash and wax; campgrounds;
      carpentry; roof, shingle, and glass repair; dance schools and dance
      studios; dating services; dry cleaning, pressing, dyeing, and
      laundering; electrical and electronic repair and installation;
      excavating and grading; farm implement repair of all kinds; flying
      service; furniture, rug, carpet, and upholstery repair and cleaning;
      fur storage and repair; golf and country clubs and all commercial
      recreation; gun and camera repair; house and building moving;
      household appliance, television, and radio repair; janitorial and
      building maintenance or cleaning; jewelry and watch repair; lawn
      care, landscaping, and tree trimming and removal; limousine service,
      including driver; machine operator; machine repair of all kinds;
      motor repair; motorcycle, scooter, and bicycle repair; oilers and
      lubricators; office and business machine repair; painting, papering,
      and interior decorating; parking facilities; pay television; pet
      grooming; pipe fitting and plumbing; wood preparation; executive
      search agencies; private employment agencies, excluding services for
      placing a person in employment where the principal place of
      employment of that person is to be located outside of the state;
      reflexology; security and detective services; sewage services for
      nonresidential commercial operations; sewing and stitching; shoe
      repair and shoeshine; sign construction and installation; storage of
      household goods, mini-storage, and warehousing of raw agricultural
      products; swimming pool cleaning and maintenance; tanning beds or
      salons; taxidermy services; telephone answering service; test
      laboratories, including mobile testing laboratories and field testing
      by testing laboratories, and excluding tests on humans or animals;
      termite, bug, roach, and pest eradicators; tin and sheet metal
      repair; transportation service consisting of the rental of
      recreational vehicles or recreational boats, or the rental of motor
      vehicles subject to registration which are registered for a gross
      weight of thirteen tons or less for a period of sixty days or less,
      or the rental of aircraft for a period of sixty days or less; Turkish
      baths, massage, and reducing salons, excluding services provided by
      massage therapists licensed under chapter 152C; water conditioning
      and softening; weighing; welding; well drilling; wrapping, packing,
      and packaging of merchandise other than processed meat, fish, fowl,
      and vegetables; wrecking service; wrecker and towing.
         For the purposes of this subsection, "financial institutions"
      means all national banks, federally chartered savings and loan
      associations, federally chartered savings banks, federally chartered
      credit unions, banks organized under chapter 524, savings and loan
      associations and savings banks organized under chapter 534, credit
      unions organized under chapter 533, and all banks, savings banks,
      credit unions, and savings and loan associations chartered or
      otherwise created under the laws of any state and doing business in
      Iowa.
         7. a.  A tax of six percent is imposed upon the sales price
      from the sales, furnishing, or service of solid waste collection and
      disposal service.
         (1)  For purposes of this subsection, "solid waste" means
      garbage, refuse, sludge from a water supply treatment plant or air
      contaminant treatment facility, and other discarded waste materials
      and sludges, in solid, semisolid, liquid, or contained gaseous form,
      resulting from nonresidential commercial operations, but does not
      include auto hulks; street sweepings; ash; construction debris;
      mining waste; trees; tires; lead acid batteries; used oil; hazardous
      waste; animal waste used as fertilizer; earthen fill, boulders, or
      rock; foundry sand used for daily cover at a sanitary landfill;
      sewage sludge; solid or dissolved material in domestic sewage or
      other common pollutants in water resources, such as silt, dissolved
      or suspended solids in industrial wastewater effluents or discharges
      which are point sources subject to permits under section 402 of the
      federal Water Pollution Control Act, or dissolved materials in
      irrigation return flows; or source, special nuclear, or by-product
      material defined by the federal Atomic Energy Act of 1954.
         (2)  A recycling facility that separates or processes recyclable
      materials and that reduces the volume of the waste by at least
      eighty-five percent is exempt from the tax imposed by this subsection
      if the waste exempted is collected and disposed of separately from
      other solid waste.
         b.  A person who transports solid waste generated by that
      person or another person without compensation shall pay the tax
      imposed by this subsection at the collection or disposal facility
      based on the disposal charge or tipping fee.  However, the costs of a
      service or portion of a service to collect and manage recyclable
      materials separated from solid waste by the waste generator are
      exempt from the tax imposed by this subsection.
         8. a.  A tax of six percent is imposed on the sales price from
      sales of bundled transactions.  For the purposes of this subsection,
      a "bundled transaction" is the retail sale of two or more
      distinct and identifiable products, except real property and services
      to real property, which are sold for one nonitemized price.  A
      "bundled transaction" does not include the sale of any products
      in which the sales price varies, or is negotiable, based on the
      selection by the purchaser of the products included in the
      transaction.
         b.  "Distinct and identifiable products" does not include any
      of the following:
         (1)  Packaging or other materials that accompany the retail sale
      of the products and are incidental or immaterial to the retail sale
      of the products.
         (2)  A product provided free of charge with the required purchase
      of another product.  A product is "provided free of charge" if
      the sales price of the product purchased does not vary depending on
      the inclusion of the product which is provided free of charge.
         (3)  Items included in the definition of "sales price"
      pursuant to section 423.1.
         c.  "One nonitemized price" does not include a price that is
      separately identified by product on binding sales or other supporting
      sales-related documentation made available to the customer in paper
      or electronic form.
         9.  A tax of six percent is imposed upon the sales price from any
      mobile telecommunications service which this state is allowed to tax
      by the provisions of the federal Mobile Telecommunications Sourcing
      Act, Pub. L. No. 106-252, 4 U.S.C. § 116 et seq.  For purposes of
      this subsection, taxes on mobile telecommunications service, as
      defined under the federal Mobile Telecommunications Sourcing Act that
      are deemed to be provided by the customer's home service provider,
      shall be paid to the taxing jurisdiction whose territorial limits
      encompass the customer's place of primary use, regardless of where
      the mobile telecommunications service originates, terminates, or
      passes through and shall in all other respects be taxed in conformity
      with the federal Mobile Telecommunications Sourcing Act.  All other
      provisions of the federal Mobile Telecommunications Sourcing Act are
      adopted by the state of Iowa and incorporated into this subsection by
      reference.  With respect to mobile telecommunications service under
      the federal Mobile Telecommunications Sourcing Act, the director
      shall, if requested, enter into agreements consistent with the
      provisions of the federal Act.
         10.  Any person or that person's affiliate, which is a retailer in
      this state or a retailer maintaining a business in this state under
      this chapter, that enters into a contract with an agency of this
      state must register, collect, and remit Iowa sales tax under this
      chapter on all sales of tangible personal property and enumerated
      services.  Every bid submitted and each contract executed by a state
      agency shall contain a certification by the bidder or contractor
      stating that the bidder or contractor is registered with the
      department and will collect and remit Iowa sales tax due under this
      chapter.  In the certification, the bidder or contractor shall also
      acknowledge that the state agency may declare the contract or bid
      void if the certification is false.  Fraudulent certification, by act
      or omission, may result in the state agency or its representative
      filing for damages for breach of contract.
         For the purposes of this subsection, the following definitions
      apply:
         a.  "Affiliate" means any entity to which any of the following
      applies:
         (1)  Directly, indirectly, or constructively controls another
      entity.
         (2)  Is directly, indirectly, or constructively controlled by
      another entity.
         (3)  Is subject to the control of a common entity.  A common
      entity is one which owns directly or individually more than ten
      percent of the voting securities of the entity.
         b.  "State agency" means an authority, board, commission,
      department, instrumentality, or other administrative office or unit
      of this state, or any other state entity reported in the Iowa
      comprehensive annual financial report, including public institutions
      of higher education.
         c.  "Voting security" means a security to which any of the
      following applies:
         (1)  Confers upon the holder the right to vote for the election of
      members of the board of directors or similar governing body of the
      entity.
         (2)  Is convertible into, or entitles the holder to receive upon
      its exercise, a security that confers such a right to vote.
         (3)  Is a general partnership interest.
         11. a.  All revenues arising under the operation of the
      provisions of this section shall be deposited into the general fund
      of the state.
         b.  Subsequent to the deposit into the general fund of the
      state and after the transfer of such revenues collected under chapter
      423B, the department shall transfer one-sixth of such remaining
      revenues to the secure an advanced vision for education fund created
      in section 423F.2.  This paragraph is repealed December 31, 2029.
         12.  All taxes collected under this chapter by a retailer or any
      individual are deemed to be held in trust for the state of Iowa.
         13.  The sales tax rate of six percent is reduced to five percent
      on January 1, 2030.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §95, 205; 2004 Acts, ch 1073, §24, 25;
      2005 Acts, ch 140, §5, 18, 43; 2006 Acts, ch 1158, §70, 80; 2007
      Acts, ch 119, §6; 2007 Acts, ch 186, §20; 2008 Acts, ch 1134, §4--10,
      36
         Referred to in § 28A.17, 29C.15, 99B.7B, 123.187, 321.105A,
      328.26, 423.1, 423.3, 423.4, 423.5, 423.6, 423.22, 423.26, 423.30,
      423.34, 423.36, 423.40, 423.41
         Local sales and services tax, § 423B.5 et seq.

Footnotes

         Former § 423.2 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, § 151, 205
         2006 amendment to subsection 8 takes effect January 1, 2008; 2006
      Acts, ch 1158, §80
         Applicability of tax increase to certain sales; refunds to certain
      construction contractors; 2008 Acts, ch 1134, §35, 36
        423.3  EXEMPTIONS.
         There is exempted from the provisions of this subchapter and from
      the computation of the amount of tax imposed by it the following:
         1.  The sales price from sales of tangible personal property and
      services furnished which this state is prohibited from taxing under
      the Constitution or laws of the United States or under the
      Constitution of this state.
         2.  The sales price of sales for resale of tangible personal
      property or taxable services, or for resale of tangible personal
      property in connection with the furnishing of taxable services except
      for sales, other than leases or rentals, which are sales of
      machinery, equipment, attachments, and replacement parts specifically
      enumerated in subsection 37 and used in the manner described in
      subsection 37 or the purchase of tangible personal property, the
      leasing or rental of which is exempted from tax by subsection 49.
         3.  The sales price of agricultural breeding livestock and
      domesticated fowl.
         4.  The sales price of commercial fertilizer.
         5. a.  The sales price of agricultural limestone, herbicide,
      pesticide, insecticide, including adjuvants, surfactants, and other
      products directly related to the application enhancement of those
      products, food, medication, or agricultural drain tile, including
      installation of agricultural drain tile, any of which are to be used
      in disease control, weed control, insect control, or health promotion
      of plants or livestock produced as part of agricultural production
      for market.
         b.  The following enumerated materials associated with the
      installation of agricultural drain tile which is exempt pursuant to
      paragraph "a" shall also be exempt under paragraph "a":
         (1)  Tile intakes.
         (2)  Outlet pipes and guards.
         (3)  Aluminum and gabion structures.
         (4)  Erosion control fabric.
         (5)  Water control structures.
         (6)  Miscellaneous tile fittings.
         6.  The sales price of tangible personal property which will be
      consumed as fuel in creating heat, power, or steam for grain drying,
      or for providing heat or cooling for livestock buildings or for
      greenhouses or buildings or parts of buildings dedicated to the
      production of flowering, ornamental, or vegetable plants intended for
      sale in the ordinary course of business, or for use in cultivation of
      agricultural products by aquaculture, or in implements of husbandry
      engaged in agricultural production.
         7.  The sales price of services furnished by specialized flying
      implements of husbandry used for agricultural aerial spraying.
         8.  The sales price exclusive of services of farm machinery and
      equipment, including auxiliary attachments which improve the
      performance, safety, operation, or efficiency of the machinery and
      equipment and replacement parts, if the following conditions are met:

         a.  The farm machinery and equipment shall be directly and
      primarily used in production of agricultural products.
         b.  The farm machinery and equipment shall constitute
      self-propelled implements or implements customarily drawn or attached
      to self-propelled implements or the farm machinery or equipment is a
      grain dryer.
         c.  The replacement part is used in any repair or
      reconstruction necessary to the farm machinery's or equipment's
      exempt use in the production of agricultural products.
         Vehicles subject to registration, as defined in section 423.1, or
      replacement parts for such vehicles, are not eligible for this
      exemption.
         9.  The sales price of wood chips, sawdust, hay, straw, paper, or
      other materials used for bedding in the production of agricultural
      livestock or fowl.
         10.  The sales price of gas, electricity, water, or heat to be
      used in implements of husbandry engaged in agricultural production.
         11.  The sales price exclusive of services of farm machinery and
      equipment, including auxiliary attachments which improve the
      performance, safety, operation, or efficiency of the machinery and
      equipment, and including auger systems, curtains and curtain systems,
      drip systems, fan and fan systems, shutters, inlets and shutter or
      inlet systems, and refrigerators, and replacement parts, if all of
      the following conditions are met:
         a.  The implement, machinery, or equipment is directly and
      primarily used in livestock or dairy production, aquaculture
      production, or the production of flowering, ornamental, or vegetable
      plants.
         b.  The implement is not a self-propelled implement or
      implement customarily drawn or attached to self-propelled implements.

         c.  The replacement part is used in any repair or
      reconstruction necessary to the farm machinery's or equipment's
      exempt use in livestock or dairy production, aquaculture production,
      or the production of flowering, ornamental, or vegetable plants.
         12.  The sales price, exclusive of services, from sales of
      irrigation equipment used in farming operations.
         13.  The sales price from the sale or rental of irrigation
      equipment, whether installed above or below ground, to a contractor
      or farmer if the equipment will be primarily used in agricultural
      operations.
         14.  The sales price from the sales of horses, commonly known as
      draft horses, when purchased for use and so used as draft horses.
         15.  The sales price from the sale of property which is a
      container, label, carton, pallet, packing case, wrapping, baling
      wire, twine, bag, bottle, shipping case, or other similar article or
      receptacle sold for use in agricultural, livestock, or dairy
      production.
         16.  The sales price from the sale of feed and feed supplements
      and additives when used for consumption by farm deer or bison.
         17.  The sales price of all goods, wares, or merchandise, or
      services, used for educational purposes sold to any private nonprofit
      educational institution in this state.  For the purpose of this
      subsection, "educational institution" means an institution which
      primarily functions as a school, college, or university with
      students, faculty, and an established curriculum.  The faculty of an
      educational institution must be associated with the institution and
      the curriculum must include basic courses which are offered every
      year.  "Educational institution" includes an institution
      primarily functioning as a library.
         18.  The sales price of tangible personal property sold, or of
      services furnished, to the following nonprofit corporations:
         a.  Residential care facilities and intermediate care
      facilities for persons with mental retardation and residential care
      facilities for persons with mental illness licensed by the department
      of inspections and appeals under chapter 135C.
         b.  Residential facilities licensed by the department of human
      services pursuant to chapter 237, other than those maintained by
      individuals as defined in section 237.1, subsection 7.
         c.  Rehabilitation facilities that provide accredited
      rehabilitation services to persons with disabilities which are
      accredited by the commission on accreditation of rehabilitation
      facilities or the accreditation council for services for persons with
      mental retardation and other persons with developmental disabilities
      and adult day care services approved for reimbursement by the state
      department of human services.
         d.  Community mental health centers accredited by the
      department of human services pursuant to chapter 225C.
         e.  Community health centers as defined in 42 U.S.C. § 254(c)
      and migrant health centers as defined in 42 U.S.C. § 254(b).
         f.  Home and community-based services providers certified to
      offer Medicaid waiver services by the department of human services
      that are any of the following:
         (1)  Ill and handicapped waiver service providers, described in
      441 IAC 77.30.
         (2)  Hospice providers, described in 441 IAC 77.32.
         (3)  Elderly waiver service providers, described in 441 IAC 77.33.

         (4)  AIDS/HIV waiver service providers, described in 441 IAC
      77.34.
         (5)  Federally qualified health centers, described in 441 IAC
      77.35.
         (6)  MR waiver service providers, described in 441 IAC 77.37.
         (7)  Brain injury waiver service providers, described in 441 IAC
      77.39.
         19.  The sales price of tangible personal property sold to a
      nonprofit organization which was organized for the purpose of lending
      the tangible personal property to the general public for use by them
      for nonprofit purposes.
         20.  The sales price of tangible personal property sold, or of
      services furnished, to nonprofit legal aid organizations.
         21.  The sales price of goods, wares, or merchandise, or of
      services, used for educational, scientific, historic preservation, or
      aesthetic purpose sold to a nonprofit private museum.
         22.  The sales price from sales of goods, wares, or merchandise,
      or from services furnished, to a nonprofit private art center to be
      used in the operation of the art center.
         23.  The sales price of tangible personal property sold, or of
      services furnished, by a fair organized under chapter 174.
         24.  The sales price from services furnished by the notification
      center established pursuant to section 480.3, and the vendor selected
      pursuant to section 480.3 to provide the notification service.
         25.  The sales price of food and beverages sold for human
      consumption by a nonprofit organization which principally promotes a
      food or beverage product for human consumption produced, grown, or
      raised in this state and whose income is exempt from federal taxation
      under section 501(c) of the Internal Revenue Code.
         26.  The sales price of tangible personal property sold, or of
      services furnished, to a statewide nonprofit organ procurement
      organization, as defined in section 142C.2.
         27.  The sales price of tangible personal property sold, or of
      services furnished, to a nonprofit hospital licensed pursuant to
      chapter 135B to be used in the operation of the hospital.
         28.  The sales price of tangible personal property sold, or of
      services furnished, to a freestanding nonprofit hospice facility
      which operates a hospice program as defined in 42 C.F.R., ch. IV, §
      418.3, which property or services are to be used in the hospice
      program.
         29.  The sales price of all goods, wares, or merchandise sold, or
      of services furnished, which are used in the fulfillment of a written
      construction contract with a nonprofit hospital licensed pursuant to
      chapter 135B if all of the following apply:
         a.  The sales and delivery of the goods, wares, or
      merchandise, or the services furnished occurred between July 1, 1998,
      and December 31, 2001.
         b.  The written construction contract was entered into prior
      to December 31, 1999, or bonds to fund the construction were issued
      prior to December 31, 1999.
         c.  The sales or services were purchased by a contractor as
      the agent for the hospital or were purchased directly by the
      hospital.
         30.  The sales price of livestock ear tags sold by a nonprofit
      organization whose income is exempt from federal taxation under
      section 501(c)(6) of the Internal Revenue Code where the proceeds are
      used in bovine research programs selected or approved by such
      organization.
         31.  The sales price of goods, wares, or merchandise sold to and
      of services furnished, and used for public purposes sold to a
      tax-certifying or tax-levying body of the state or a governmental
      subdivision of the state, including regional transit systems, as
      defined in section 324A.1, the state board of regents, department of
      human services, state department of transportation, any municipally
      owned solid waste facility which sells all or part of its processed
      waste as fuel to a municipally owned public utility, and all
      divisions, boards, commissions, agencies, or instrumentalities of
      state, federal, county, or municipal government which have no
      earnings going to the benefit of an equity investor or stockholder,
      except any of the following:
         a.  The sales price of goods, wares, or merchandise sold to,
      or of services furnished, and used by or in connection with the
      operation of any municipally owned public utility engaged in selling
      gas, electricity, heat, pay television service, or communication
      service to the general public.
         b.  The sales price of furnishing of sewage services to a
      county or municipality on behalf of nonresidential commercial
      operations.
         c.  The furnishing of solid waste collection and disposal
      service to a county or municipality on behalf of nonresidential
      commercial operations located within the county or municipality.
         The exemption provided by this subsection shall also apply to all
      such sales of goods, wares, or merchandise or of services furnished
      and subject to use tax.
         32.  The sales price of tangible personal property sold, or of
      services furnished, by a county or city.  This exemption does not
      apply to any of the following:
         a.  The tax specifically imposed under section 423.2 on the
      sales price from sales or furnishing of gas, electricity, water,
      heat, pay television service, or communication service to the public
      by a municipal corporation in its proprietary capacity.
         b.  The sale or furnishing of solid waste collection and
      disposal service to nonresidential commercial operations.
         c.  The sale or furnishing of sewage service for
      nonresidential commercial operations.
         d.  Fees paid to cities and counties for the privilege of
      participating in any athletic sports.
         33. a.  The sales price of mementos and other items relating
      to Iowa history and historic sites, the general assembly, and the
      state capitol, sold by the legislative services agency and its
      legislative information office on the premises of property under the
      control of the legislative council, at the state capitol, and on
      other state property.
         b.  The legislative services agency is not a retailer under
      this chapter and the sale of items or provision of services by the
      legislative services agency is not a retail sale under this chapter
      and is exempt from the sales tax.
         34.  The sales price from sales of mementos and other items
      relating to Iowa history and historic sites by the department of
      cultural affairs on the premises of property under its control and at
      the state capitol.
         35.  The sales price from sales or services furnished by the state
      fair organized under chapter 173.
         36.  The sales price from sales of tangible personal property or
      of the sale or furnishing of electrical energy, natural or artificial
      gas, or communication service to another state or political
      subdivision of another state if the other state provides a similar
      reciprocal exemption for this state and political subdivision of this
      state.
         37.  The sales price of services on or connected with new
      construction, reconstruction, alteration, expansion, remodeling, or
      the services of a general building contractor, architect, or
      engineer.  The exemption in this subsection also applies to the sales
      price on the lease or rental of all machinery, equipment, and
      replacement parts directly and primarily used by owners, contractors,
      subcontractors, and builders for new construction, reconstruction,
      alteration, expansion, or remodeling of real property or structures
      and of all machinery, equipment, and replacement parts which improve
      the performance, safety, operation, or efficiency of the machinery,
      equipment, and replacement parts so used.
         38.  The sales price from the sale of building materials,
      supplies, or equipment sold to rural water districts organized under
      chapter 504 as provided in chapter 357A and used for the construction
      of facilities of a rural water district.
         39.  The sales price from "casual sales".
         a.  "Casual sales" means:
         (1)  Sales of tangible personal property, or the furnishing of
      services, of a nonrecurring nature, by the owner, if the seller, at
      the time of the sale, is not engaged for profit in the business of
      selling tangible personal property or services taxed under section
      423.2.
         (2)  The sale of all or substantially all of the tangible personal
      property or services held or used by a seller in the course of the
      seller's trade or business for which the seller is required to hold a
      sales tax permit when the seller sells or otherwise transfers the
      trade or business to another person who shall engage in a similar
      trade or business.
         (3)  Notwithstanding subparagraph (1), the sale, furnishing, or
      performance of a service that is of a recurring nature by the owner
      if, at the time of the sale, all of the following apply:
         (a)  The seller is not engaged for profit in the business of the
      selling, furnishing, or performance of services taxed under section
      423.2.  For purposes of this subparagraph, the fact of the recurring
      nature of selling, furnishing, or performance of services does not
      constitute by itself engaging for profit in the business of selling,
      furnishing, or performance of services.
         (b)  The owner of the business is the only person performing the
      service.
         (c)  The owner of the business is a full-time student.
         (d)  The total gross receipts from the sales, furnishing, or
      performance of services during the calendar year does not exceed five
      thousand dollars.
         b.  The exemption under this subsection does not apply to
      vehicles subject to registration, all-terrain vehicles, snowmobiles,
      off-road motorcycles, off-road utility vehicles, aircraft, or
      commercial or pleasure watercraft or water vessels.
         40.  The sales price from the sale of automotive fluids to a
      retailer to be used either in providing a service which includes the
      installation or application of the fluids in or on a motor vehicle,
      which service is subject to section 423.2, subsection 6, or to be
      installed in or applied to a motor vehicle which the retailer intends
      to sell, which sale is subject to section 423.26.  For purposes of
      this subsection, automotive fluids are all those which are refined,
      manufactured, or otherwise processed and packaged for sale prior to
      their installation in or application to a motor vehicle.  They
      include but are not limited to motor oil and other lubricants,
      hydraulic fluids, brake fluid, transmission fluid, sealants,
      undercoatings, antifreeze, and gasoline additives.
         41.  The sales price from the rental of motion picture films,
      video and audio tapes, video and audio discs, records, photos, copy,
      scripts, or other media used for the purpose of transmitting that
      which can be seen, heard, or read, if either of the following
      conditions are met:
         a.  The lessee imposes a charge for the viewing of such media
      and the charge for the viewing is subject to taxation under this
      subchapter or is subject to use tax.
         b.  The lessee broadcasts the contents of such media for
      public viewing or listening.
         42.  The sales price from the sale of tangible personal property
      consisting of advertising material including paper to a person in
      Iowa if that person or that person's agent will, subsequent to the
      sale, send that advertising material outside this state and the
      material is subsequently used solely outside of Iowa.  For the
      purpose of this subsection, "advertising material" means any
      brochure, catalog, leaflet, flyer, order form, return envelope, or
      similar item used to promote sales of property or services.
         43.  The sales price from the sale of property or of services
      performed on property which the retailer transfers to a carrier for
      shipment to a point outside of Iowa, places in the United States mail
      or parcel post directed to a point outside of Iowa, or transports to
      a point outside of Iowa by means of the retailer's own vehicles, and
      which is not thereafter returned to a point within Iowa, except
      solely in the course of interstate commerce or transportation.  This
      exemption shall not apply if the purchaser, consumer, or their agent,
      other than a carrier, takes physical possession of the property in
      Iowa.
         44.  The sales price from the sale of wine which is shipped from
      outside Iowa and which meets the requirements for sales and use tax
      exemption pursuant to section 123.187.
         45.  The sales price from the sale of property which is a
      container, label, carton, pallet, packing case, wrapping paper,
      twine, bag, bottle, shipping case, or other similar article or
      receptacle sold to retailers or manufacturers for the purpose of
      packaging or facilitating the transportation of tangible personal
      property sold at retail or transferred in association with the
      maintenance or repair of fabric or clothing.
         46.  The sales price from sales or rentals to a printer or
      publisher of the following:   acetate; anti-halation backing;
      antistatic spray; back lining; base material used as a carrier for
      light sensitive emulsions; blankets; blow-ups; bronze powder; carbon
      tissue; codas; color filters; color separations; contacts; continuous
      tone separations; creative art; custom dies and die cutting
      materials; dampener sleeves; dampening solution; design and styling;
      diazo coating; dot etching; dot etching solutions; drawings;
      drawsheets; driers; duplicate films or prints; electronically
      digitized images; electrotypes; end product of image modulation;
      engravings; etch solutions; film; finished art or final art; fix;
      fixative spray; flats; flying pasters; foils; goldenrod paper; gum;
      halftones; illustrations; ink; ink paste; keylines; lacquer; lasering
      images; layouts; lettering; line negatives and positives; linotypes;
      lithographic offset plates; magnesium and zinc etchings; masking
      paper; masks; masters; mats; mat service; metal toner; models and
      modeling; mylar; negatives; nonoffset spray; opaque film process
      paper; opaquing; padding compound; paper stock; photographic
      materials:  acids, plastic film, desensitizer emulsion, exposure
      chemicals, fix, developers, and paper; photography, day rate;
      photopolymer coating; photographs; photostats; photo-display tape;
      phototypesetter materials; ph-indicator sticks; positives; press
      pack; printing cylinders; printing plates, all types; process
      lettering; proof paper; proofs and proof processes, all types; pumice
      powder; purchased author alterations; purchased composition;
      purchased phototypesetting; purchased stripping and pasteups; red
      litho tape; reducers; roller covering; screen tints; sketches;
      stepped plates; stereotypes; strip types; substrate; tints; tissue
      overlays; toners; transparencies; tympan; typesetting; typography;
      varnishes; veloxes; wood mounts; and any other items used in a like
      capacity to any of the above enumerated items by the printer or
      publisher to complete a finished product for sale at retail.
      Expendable tools and supplies which are not enumerated in this
      subsection are excluded from the exemption.  "Printer" means that
      portion of a person's business engaged in printing that completes a
      finished product for ultimate sale at retail or means that portion of
      a person's business used to complete a finished printed packaging
      material used to package a product for ultimate sale at retail.
      "Printer" does not mean an in-house printer who prints or
      copyrights its own materials.
         47. a.  The sales price from the sale or rental of computers,
      machinery, and equipment, including replacement parts, and materials
      used to construct or self-construct computers, machinery, and
      equipment if such items are any of the following:
         (1)  Directly and primarily used in processing by a manufacturer.

         (2)  Directly and primarily used to maintain the integrity of the
      product or to maintain unique environmental conditions required for
      either the product or the computers, machinery, and equipment used in
      processing by a manufacturer, including test equipment used to
      control quality and specifications of the product.
         (3)  Directly and primarily used in research and development of
      new products or processes of processing.
         (4)  Computers used in processing or storage of data or
      information by an insurance company, financial institution, or
      commercial enterprise.
         (5)  Directly and primarily used in recycling or reprocessing of
      waste products.
         (6)  Pollution-control equipment used by a manufacturer, including
      but not limited to that required or certified by an agency of this
      state or of the United States government.
         b.  The sales price from the sale of fuel used in creating
      heat, power, steam, or for generating electrical current, or from the
      sale of electricity, consumed by computers, machinery, or equipment
      used in an exempt manner described in paragraph "a", subparagraph
      (1), (2), (3), (5), or (6).
         c.  The sales price from the sale or rental of the following
      shall not be exempt from the tax imposed by this subchapter:
         (1)  Hand tools.
         (2)  Point-of-sale equipment and computers.
         (3)  Industrial machinery, equipment, and computers, including
      pollution-control equipment within the scope of section 427A.1,
      subsection 1, paragraphs "h" and "i".
         (4)  Vehicles subject to registration, except vehicles subject to
      registration which are directly and primarily used in recycling or
      reprocessing of waste products.
         d.  As used in this subsection:
         (1)  "Commercial enterprise" includes businesses and
      manufacturers conducted for profit and centers for data processing
      services to insurance companies, financial institutions, businesses,
      and manufacturers, but excludes professions and occupations and
      nonprofit organizations.
         (2)  "Financial institution" means as defined in section
      527.2.
         (3)  "Insurance company" means an insurer organized or
      operating under chapter 508, 514, 515, 518, 518A, 519, or 520, or
      authorized to do business in Iowa as an insurer or an insurance
      producer under chapter 522B.
         (4)  "Manufacturer" means as defined in section 428.20, but
      also includes contract manufacturers.  A contract manufacturer is a
      manufacturer that otherwise falls within the definition of
      manufacturer under section 428.20, except that a contract
      manufacturer does not sell the tangible personal property the
      contract manufacturer processes on behalf of other manufacturers.  A
      business engaged in activities subsequent to the extractive process
      of quarrying or mining, such as crushing, washing, sizing, or
      blending of aggregate materials, is a manufacturer with respect to
      these activities.
         (5)  "Processing" means a series of operations in which
      materials are manufactured, refined, purified, created, combined, or
      transformed by a manufacturer, ultimately into tangible personal
      property.  Processing encompasses all activities commencing with the
      receipt or producing of raw materials by the manufacturer and ending
      at the point products are delivered for shipment or transferred from
      the manufacturer.  Processing includes but is not limited to
      refinement or purification of materials; treatment of materials to
      change their form, context, or condition; maintenance of the quality
      or integrity of materials, components, or products; maintenance of
      environmental conditions necessary for materials, components, or
      products; quality control activities; and construction of packaging
      and shipping devices, placement into shipping containers or any type
      of shipping devices or medium, and the movement of materials,
      components, or products until shipment from the processor.
         (6)  "Receipt or producing of raw materials" means activities
      performed upon tangible personal property only.  With respect to raw
      materials produced from or upon real estate, the receipt or producing
      of raw materials is deemed to occur immediately following the
      severance of the raw materials from the real estate.
         47A. a.  Subject to paragraph "b", the sales price from
      the sale or rental of central office equipment or transmission
      equipment primarily used by local exchange carriers and competitive
      local exchange service providers as defined in section 476.96; by
      franchised cable television operators, mutual companies, municipal
      utilities, cooperatives, and companies furnishing communications
      services that are not subject to rate regulation as provided in
      chapter 476; by long distance companies as defined in section 477.10;
      or for a commercial mobile radio service as defined in 47 C.F.R. §
      20.3 in the furnishing of telecommunications services on a commercial
      basis.  For the purposes of this subsection, "central office
      equipment" means equipment utilized in the initiating, processing,
      amplifying, switching, or monitoring of telecommunications services.
      "Transmission equipment" means equipment utilized in the process
      of sending information from one location to another location.
      "Central office equipment" and "transmission equipment" also
      include ancillary equipment and apparatus which support, regulate,
      control, repair, test, or enable such equipment to accomplish its
      function.
         b.  The exemption in this subsection shall be phased in by
      means of tax refunds as follows:
         (1)  If the sale or rental occurs on or after July 1, 2006,
      through June 30, 2007, one-seventh of the state tax on the sales
      price shall be refunded.
         (2)  If the sale or rental occurs on or after July 1, 2007,
      through June 30, 2008, two-sevenths of the state tax on the sales
      price shall be refunded.
         (3)  If the sale or rental occurs on or after July 1, 2008,
      through June 30, 2009, three-sevenths of the state tax on the sales
      price shall be refunded.
         (4)  If the sale or rental occurs on or after July 1, 2009,
      through June 30, 2010, four-sevenths of the state tax on the sales
      price shall be refunded.
         (5)  If the sale or rental occurs on or after July 1, 2010,
      through June 30, 2011, five-sevenths of the state tax on the sales
      price shall be refunded.
         (6)  If the sale or rental occurs on or after July 1, 2011,
      through June 30, 2012, six-sevenths of the state tax on the sales
      price shall be refunded.
         (7)  If the sale or rental occurs on or after July 1, 2012, the
      sales price is exempt and no payment of tax and subsequent refund are
      required.
         c.  For sales or rentals occurring on or after July 1, 2006,
      through June 30, 2012, a refund of the tax paid as provided in
      paragraph "b", subparagraph (1), (2), (3), (4), (5), or (6), must
      be applied for, not later than six months after the month in which
      the sale or rental occurred, in the manner and on the forms provided
      by the department.  Refunds shall only be of the state tax collected.
      Refunds authorized shall accrue interest at the rate in effect under
      section 421.7 from the first day of the second calendar month
      following the date the refund claim is received by the department.
         48.  The sales price from the furnishing of the design and
      installation of new industrial machinery or equipment, including
      electrical and electronic installation.
         49.  The sales price from the sale of carbon dioxide in a liquid,
      solid, or gaseous form, electricity, steam, and other taxable
      services and the lease or rental of tangible personal property when
      used by a manufacturer of food products to produce marketable food
      products for human consumption, including but not limited to
      treatment of material to change its form, context, or condition, in
      order to produce the food product, maintenance of quality or
      integrity of the food product, changing or maintenance of temperature
      levels necessary to avoid spoilage or to hold the food product in
      marketable condition, maintenance of environmental conditions
      necessary for the safe or efficient use of machinery and material
      used to produce the food product, sanitation and quality control
      activities, formation of packaging, placement into shipping
      containers, and movement of the material or food product until
      shipment from the building of manufacture.
         50.  The sales price of sales of electricity, steam, or any
      taxable service when purchased and used in the processing of tangible
      personal property intended to be sold ultimately at retail or of any
      fuel which is consumed in creating power, heat, or steam for
      processing or for generating electric current.
         51.  The sales price of tangible personal property sold for
      processing.  Tangible personal property is sold for processing within
      the meaning of this subsection only when it is intended that the
      property will, by means of fabrication, compounding, manufacturing,
      or germination, become an integral part of other tangible personal
      property intended to be sold ultimately at retail; or for generating
      electric current; or the property is a chemical, solvent, sorbent, or
      reagent, which is directly used and is consumed, dissipated, or
      depleted, in processing tangible personal property which is intended
      to be sold ultimately at retail or consumed in the maintenance or
      repair of fabric or clothing, and which may not become a component or
      integral part of the finished product.  The distribution to the
      public of free newspapers or shoppers guides is a retail sale for
      purposes of the processing exemption set out in this subsection and
      in subsection 50.
         52.  The sales price from the sale of argon and other similar
      gases to be used in the manufacturing process.
         53.  The sales price from the sale of electricity to water
      companies assessed for property tax pursuant to sections 428.24,
      428.26, and 428.28 which is used solely for the purpose of pumping
      water from a river or well.
         54.  The sales price from the sale of wind energy conversion
      property to be used as an electric power source and the sale of the
      materials used to manufacture, install, or construct wind energy
      conversion property used or to be used as an electric power source.
         For purposes of this subsection, "wind energy conversion
      property" means any device, including but not limited to a wind
      charger, windmill, wind turbine, tower and electrical equipment, pad
      mount transformers, power lines, and substation, which converts wind
      energy to a form of usable energy.
         55.  The sales price from the sales of newspapers, free
      newspapers, or shoppers guides and the printing and publishing of
      such newspapers and shoppers guides, and envelopes for advertising.
         56.  The sales price from the sale of motor fuel and special fuel
      consumed for highway use or in watercraft or aircraft where the fuel
      tax has been imposed and paid and no refund has been or will be
      allowed and the sales price from the sales of ethanol blended
      gasoline, as defined in section 214A.1.
         57.  The sales price from all sales of food and food ingredients.
      However, as used in this subsection, a sale of "food and food
      ingredients" does not include a sale of alcoholic beverages, candy,
      or dietary supplements; food sold through vending machines; or sales
      of prepared food, soft drinks, or tobacco.  For the purposes of this
      subsection:
         a.  "Alcoholic beverages" means beverages that are suitable
      for human consumption and contain one-half of one percent or more of
      alcohol by volume.
         b.  "Candy" means a preparation of sugar, honey, or other
      natural or artificial sweeteners in combination with chocolate,
      fruits, nuts, or other ingredients or flavorings in the form of bars,
      drops, or pieces.  Candy shall not include any preparation containing
      flour and shall require no refrigeration.
         c.  "Dietary supplement" means any product, other than
      tobacco, intended to supplement the diet that contains one or more of
      the following dietary ingredients:
         (1)  A vitamin.
         (2)  A mineral.
         (3)  An herb or other botanical.
         (4)  An amino acid.
         (5)  A dietary substance for use by humans to supplement the diet
      by increasing the total dietary intake.
         (6)  A concentrate, metabolite, constituent, extract, or
      combination of any of the ingredients in subparagraphs (1) through
      (5) that is intended for ingestion in tablet, capsule, powder,
      softgel, gelcap, or liquid form, or if not intended for ingestion in
      such a form, is not represented as conventional food and is not
      represented for use as a sole item of a meal or of the diet; and is
      required to be labeled as a dietary supplement, identifiable by the
      "supplement facts" box found on the label and as required pursuant to
      21 C.F.R. § 101.36.
         d.  "Food and food ingredients" means substances, whether in
      liquid, concentrated, solid, frozen, dried, or dehydrated form, that
      are sold for ingestion or chewing by humans and are consumed for
      their taste or nutritional value.
         e.  "Food sold through vending machines" means food dispensed
      from a machine or other mechanical device that accepts payment, other
      than food which would be qualified for exemption under subsection 58
      if purchased with a coupon described in subsection 58.
         f.  "Prepared food" means any of following:
         (1)  Food sold in a heated state or heated by the seller,
      including food sold by a caterer.
         (2)  Two or more food ingredients mixed or combined by the seller
      for sale as a single item.
         (3)  "Prepared food", for the purposes of this paragraph, does
      not include food that is any of the following:
         (a)  Only cut, repackaged, or pasteurized by the seller.
         (b)  Eggs, fish, meat, poultry, and foods containing these raw
      animal foods requiring cooking by the consumer as recommended by the
      United States food and drug administration, ch. 3, part 401.11 of its
      food code, so as to prevent foodborne illnesses.
         (c)  Bakery items sold by the seller which baked them.  The words
      "bakery items" includes but is not limited to breads, rolls,
      buns, biscuits, bagels, croissants, pastries, donuts, Danish, cakes,
      tortes, pies, tarts, muffins, bars, cookies, and tortillas.
         (d)  Food sold without eating utensils provided by the seller in
      an unheated state as a single item which is priced by weight or
      volume.
         (4)  Food sold with eating utensils provided by the seller,
      including plates, knives, forks, spoons, glasses, cups, napkins, or
      straws.  A plate does not include a container or packaging used to
      transport food.
         g.  "Soft drinks" means nonalcoholic beverages that contain
      natural or artificial sweeteners.  "Soft drinks" does not include
      beverages that contain milk or milk products; soy, rice, or similar
      milk substitutes; or greater than fifty percent of vegetable or fruit
      juice by volume.
         h.  "Tobacco" means cigarettes, cigars, chewing or pipe
      tobacco, or any other item that contains tobacco.
         58.  The sales price from the sale of items purchased with coupons
      issued under the federal Food Stamp Act of 1977, 7 U.S.C. § 2011 et
      seq.
         59.  In transactions in which tangible personal property is traded
      toward the sales price of other tangible personal property, that
      portion of the sales price which is not payable in money to the
      retailer is exempted from the taxable amount if the following
      conditions are met:
         a.  The tangible personal property traded to the retailer is
      the type of property normally sold in the regular course of the
      retailer's business.
         b.  The tangible personal property traded to the retailer is
      intended by the retailer to be ultimately sold at retail or is
      intended to be used by the retailer or another in the remanufacturing
      of a like item.
         60.  The sales price from the sale or rental of prescription
      drugs, durable medical equipment, mobility enhancing equipment,
      prosthetic devices, and other medical devices intended for human use
      or consumption.
         For the purposes of this subsection:
         a.  "Drug" means a compound, substance, or preparation, and
      any component of a compound, substance, or preparation, other than
      food and food ingredients, dietary supplements, or alcoholic
      beverages, which is any of the following:
         (1)  Recognized in the official United States pharmacopoeia,
      official homeopathic pharmacopoeia of the United States, or official
      national formulary, and supplement to any of them.
         (2)  Intended for use in the diagnosis, cure, mitigation,
      treatment, or prevention of disease.
         (3)  Intended to affect the structure or any function of the body.

         b.  "Durable medical equipment" means equipment, including
      repair and replacement parts, but does not include mobility enhancing
      equipment, to which all of the following apply:
         (1)  Can withstand repeated use.
         (2)  Is primarily and customarily used to serve a medical purpose.

         (3)  Generally is not useful to a person in the absence of illness
      or injury.
         (4)  Is not worn in or on the body.
         (5)  Is for home use only.
         (6)  Is prescribed by a practitioner.
         c.  "Mobility enhancing equipment" means equipment, including
      repair and replacement parts, but does not include durable medical
      equipment, to which all of the following apply:
         (1)  Is primarily and customarily used to provide or increase the
      ability to move from one place to another and which is appropriate
      for use either in a home or a motor vehicle.
         (2)  Is not generally used by persons with normal mobility.
         (3)  Does not include any motor vehicle or equipment on a motor
      vehicle normally provided by a motor vehicle manufacturer.
         (4)  Is prescribed by a practitioner.
         d.  "Other medical device" means equipment or a supply that is
      not a drug, durable medical equipment, mobility enhancing equipment,
      or prosthetic device.  "Other medical devices" includes but is
      not limited to ostomy, urological, and tracheostomy supplies,
      diabetic testing materials, hypodermic syringes and needles,
      anesthesia trays, biopsy trays and biopsy needles, cannula systems,
      catheter trays and invasive catheters, fistula sets, irrigation
      solutions, intravenous administering solutions and stopcocks,
      myelogram trays, small vein infusion kits, spinal puncture trays, and
      venous blood sets intended to be dispensed for human use with or
      without a prescription to an ultimate user.
         e.  "Practitioner" means a practitioner as defined in section
      155A.3, or a person licensed to prescribe drugs.
         f.  "Prescription" means an order, formula, or recipe issued
      in any form of oral, written, electronic, or other means of
      transmission by a practitioner.
         g.  "Prescription drug" means a drug intended to be dispensed
      to an ultimate user pursuant to a prescription drug order, formula,
      or recipe issued in any form of oral, written, electronic, or other
      means of transmission by a duly licensed practitioner, or oxygen or
      insulin dispensed for human consumption with or without a
      prescription drug order or medication order.
         h.  "Prosthetic device" means a replacement, corrective, or
      supportive device including repair and replacement parts for the same
      worn on or in the body to do any of the following:
         (1)  Artificially replace a missing portion of the body.
         (2)  Prevent or correct physical deformity or malfunction.
         (3)  Support a weak or deformed portion of the body.
         "Prosthetic device" includes but is not limited to orthopedic
      or orthotic devices, ostomy equipment, urological equipment,
      tracheostomy equipment, and intraocular lenses.
         i.  "Ultimate user" means an individual who has lawfully
      obtained and possesses a prescription drug or medical device for the
      individual's own use or for the use of a member of the individual's
      household, or an individual to whom a prescription drug or medical
      device has been lawfully supplied, administered, dispensed, or
      prescribed.
         61.  The sales price from services furnished by aerial commercial
      and charter transportation services.
         62.  The sales price from the sale of raffle tickets for a raffle
      licensed pursuant to section 99B.5.
         63.  The sales price from the sale of tangible personal property
      which will be given as prizes to players in games of skill, games of
      chance, raffles, and bingo games as defined in chapter 99B.
         64.  The sales price from the sale of a modular home, as defined
      in section 435.1, to the extent of the portion of the purchase price
      of the modular home which is not attributable to the cost of the
      tangible personal property used in the processing of the modular
      home.  For purposes of this exemption, the portion of the purchase
      price which is not attributable to the cost of the tangible personal
      property used in the processing of the modular home is forty percent.

         65.  The sales price from charges paid to a provider for access to
      on-line computer services.  For purposes of this subsection,
      "on-line computer service" means a service that provides or
      enables computer access by multiple users to the internet or to other
      information made available through a computer server or other device.

         66.  The sales price from the sale or rental of information
      services.  "Information services" means every business activity,
      process, or function by which a seller or its agent accumulates,
      prepares, organizes, or conveys data, facts, knowledge, procedures,
      and like services to a buyer or its agent of such information through
      any tangible or intangible medium.  Information accumulated,
      prepared, or organized for a buyer or its agent is an information
      service even though it may incorporate preexisting components of data
      or other information.  "Information services" includes but is not
      limited to database files, mailing lists, subscription files, market
      research, credit reports, surveys, real estate listings, bond rating
      reports, abstracts of title, bad check lists, broadcasting rating
      services, wire services, and scouting reports, or other similar
      items.
         67.  The sales price of a sale at retail if the substance of the
      transaction is delivered to the purchaser digitally, electronically,
      or utilizing cable, or by radio waves, microwaves, satellites, or
      fiber optics.
         68. a.  The sales price from the sale of an article of
      clothing designed to be worn on or about the human body if all of the
      following apply:
         (1)  The sales price of the article is less than one hundred
      dollars.
         (2)  The sale takes place during a period beginning at 12:01 a.m.
      on the first Friday in August and ending at midnight on the following
      Saturday.
         b.  This subsection does not apply to any of the following:
         (1)  Sport or recreational equipment and protective equipment.
         (2)  Clothing accessories or equipment.
         (3)  The rental of clothing.
         c.  For purposes of this subsection:
         (1)  "Clothing" means all human wearing apparel suitable for
      general use.  "Clothing" includes but is not limited to the
      following:  aprons, household and shop; athletic supporters; baby
      receiving blankets; bathing suits and caps; beach capes and coats;
      belts and suspenders; boots; coats and jackets; costumes; diapers
      (children and adults, including disposable diapers); earmuffs;
      footlets; formal wear; garters and garter belts; girdles; gloves and
      mittens for general use; hats and caps; hosiery; insoles for shoes;
      lab coats; neckties; overshoes; pantyhose; rainwear; rubber pants;
      sandals; scarves; shoes and shoelaces; slippers; sneakers; socks and
      stockings; steel-toed shoes; underwear; uniforms, athletic and
      nonathletic; and wedding apparel.
         "Clothing" does not include the following:  belt buckles sold
      separately; costume masks sold separately; patches and emblems sold
      separately; sewing equipment and supplies (including but not limited
      to knitting needles, patterns, pins, scissors, sewing machines,
      sewing needles, tape measures, and thimbles); and sewing materials
      that become part of clothing (including but not limited to buttons,
      fabric, lace, thread, yarn, and zippers).
         (2)  "Clothing accessories or equipment" means incidental
      items worn on the person or in conjunction with clothing.
      "Clothing accessories or equipment" includes but is not limited
      to the following:  briefcases; cosmetics; hair notions (including but
      not limited to barrettes, hair bows, and hair nets); handbags;
      handkerchiefs; jewelry; sunglasses, nonprescription; umbrellas;
      wallets; watches; and wigs and hairpieces.
         (3)  "Protective equipment" means items for human wear and
      designed as protection for the wearer against injury or disease or as
      protection against damage or injury of other persons or property but
      not suitable for general use.  "Protective equipment" includes
      but is not limited to the following:  breathing masks; clean room
      apparel and equipment; ear and hearing protectors; face shields; hard
      hats; helmets; paint or dust respirators; protective gloves; safety
      glasses and goggles; safety belts; tool belts; and welders gloves and
      masks.
         (4)  "Sport or recreational equipment" means items designed
      for human use and worn in conjunction with an athletic or
      recreational activity that are not suitable for general use.
      "Sport or recreational equipment" includes but is not limited to
      the following:  ballet and tap shoes; cleated or spiked athletic
      shoes; gloves (including but not limited to baseball, bowling,
      boxing, hockey, and golf); goggles; hand and elbow guards; life
      preservers and vests; mouth guards; roller and ice skates; shin
      guards; shoulder pads; ski boots; waders; and wetsuits and fins.
         69.  The sales price from charges paid for the delivery of
      electricity or natural gas if the sale or furnishing of the
      electricity or natural gas or its use is exempt from the tax on sales
      prices imposed under this subchapter or from the use tax imposed
      under subchapter III.
         69A.  The sales price from surcharges paid for E911 service and
      wireless E911 service pursuant to chapter 34A.
         70.  The sales price of delivery charges.  This exemption does not
      apply to the delivery of electric energy or natural gas.
         71.  The sales price from sales of tangible personal property used
      or to be used as railroad rolling stock for transporting persons or
      property, or as materials or parts therefor.
         72.  The sales price from the sales of special fuel for diesel
      engines consumed or used in the operation of ships, barges, or
      waterborne vessels which are used primarily in or for the
      transportation of property or cargo, or the conveyance of persons for
      hire on rivers bordering on the state if the fuel is delivered by the
      seller to the purchaser's barge, ship, or waterborne vessel while it
      is afloat upon such a river.
         73.  The sales price from sales of vehicles subject to
      registration or subject only to the issuance of a certificate of
      title and sales of aircraft subject to registration under section
      328.20.
         74.  The sales price from the sale of aircraft for use in a
      scheduled interstate federal aviation administration certificated air
      carrier operation.
         75.  The sales price from the sale or rental of aircraft; the sale
      or rental of tangible personal property permanently affixed or
      attached as a component part of the aircraft, including but not
      limited to repair or replacement materials or parts; and the sales
      price of all services used for aircraft repair, remodeling, and
      maintenance services when such services are performed on aircraft,
      aircraft engines, or aircraft component materials or parts.  For the
      purposes of this exemption, "aircraft" means aircraft used in a
      scheduled interstate federal aviation administration certificated air
      carrier operation.
         76.  The sales price from the sale or rental of tangible personal
      property permanently affixed or attached as a component part of the
      aircraft, including but not limited to repair or replacement
      materials or parts; and the sales price of all services used for
      aircraft repair, remodeling, and maintenance services when such
      services are performed on aircraft, aircraft engines, or aircraft
      component materials or parts.  For the purposes of this exemption,
      "aircraft" means aircraft used in nonscheduled interstate federal
      aviation administration certificated air carrier operation operating
      under 14 C.F.R. ch. 1, pt. 135.
         77.  The sales price from the sale of aircraft to an aircraft
      dealer who in turn rents or leases the aircraft if all of the
      following apply:
         a.  The aircraft is kept in the inventory of the dealer for
      sale at all times.
         b.  The dealer reserves the right to immediately take the
      aircraft from the renter or lessee when a buyer is found.
         c.  The renter or lessee is aware that the dealer will
      immediately take the aircraft when a buyer is found.
         If an aircraft exempt under this subsection is used for any
      purpose other than leasing or renting, or the conditions in
      paragraphs "a", "b", and "c" are not continuously met,
      the dealer claiming the exemption under this subsection is liable for
      the tax that would have been due except for this subsection.  The tax
      shall be computed upon the original purchase price.
         78. a.  The sales price from sales or rental of tangible
      personal property, or services rendered by any entity where the
      profits from the sales or rental of the tangible personal property,
      or services rendered, are used by or donated to a nonprofit entity
      that is exempt from federal income taxation pursuant to section
      501(c)(3) of the Internal Revenue Code, a government entity, or a
      nonprofit private educational institution, and where the entire
      proceeds from the sales, rental, or services are expended for any of
      the following purposes:
         (1)  Educational.
         (2)  Religious.
         (3)  Charitable.  A charitable act is an act done out of goodwill,
      benevolence, and a desire to add to or to improve the good of
      humankind in general or any class or portion of humankind, with no
      pecuniary profit inuring to the person performing the service or
      giving the gift.
         b.  For purposes of this exemption, an organization that meets
      the requirements of paragraph "a" and which is created for the
      sole or primary purpose of providing athletic activities to youth
      shall be considered created for an educational purpose.
         c.  This exemption does not apply to the sales price from
      games of skill, games of chance, raffles, and bingo games as defined
      in chapter 99B.  This exemption is disallowed on the amount of the
      sales price only to the extent the profits from the sales, rental, or
      services are not used by or donated to the appropriate entity and
      expended for educational, religious, or charitable purposes.
         79.  The sales price from the sale or rental of tangible personal
      property or from services furnished to a recognized community action
      agency as provided in section 216A.93 to be used for the purposes of
      the agency.
         80. a.  For purposes of this subsection, "designated exempt
      entity" means an entity which is designated in section 423.4,
      subsection 1 or 6.
         b.  If a contractor, subcontractor, or builder is to use
      building materials, supplies, and equipment in the performance of a
      construction contract with a designated exempt entity, the person
      shall purchase such items of tangible personal property without
      liability for the tax if such property will be used in the
      performance of the construction contract and a purchasing agent
      authorization letter and an exemption certificate, issued by the
      designated exempt entity, are presented to the retailer.  The sales
      price of building materials, supplies, or equipment is exempt from
      tax by this subsection only to the extent the building materials,
      supplies, or equipment are completely consumed in the performance of
      the construction contract with the designated exempt entity.
         c.  Where the owner, contractor, subcontractor, or builder is
      also a retailer holding a retail sales tax permit and transacting
      retail sales of building materials, supplies, and equipment, the tax
      shall not be due when materials are withdrawn from inventory for use
      in construction performed for a designated exempt entity if an
      exemption certificate is received from such entity.
         d.  Tax shall not apply to tangible personal property
      purchased and consumed by a manufacturer as building materials,
      supplies, or equipment in the performance of a construction contract
      for a designated exempt entity, if a purchasing agent authorization
      letter and an exemption certificate are received from such entity and
      presented to a retailer.
         81.  The sales price from the sales of lottery tickets or shares
      pursuant to chapter 99G.
         82. a.  The sales price from the sale or rental of
      core-making, mold-making, and sand-handling machinery and equipment,
      including replacement parts, directly and primarily used in the
      mold-making process by a foundry.
         b.  The sales price from the sale of fuel used in creating
      heat, power, steam, or for generating electric current, or from the
      sale of electricity, consumed by core-making, mold-making, and
      sand-handling machinery and equipment used directly and primarily in
      the mold-making process by a foundry.
         c.  The sales price from the furnishing of the design and
      installation, including electrical and electronic installation, of
      core-making, mold-making, and sand-handling machinery and equipment
      used directly and primarily in the mold-making process by a foundry.

         83.  The sales price from noncustomer point of sale or noncustomer
      automated teller machine access or service charges assessed by a
      financial institution.  For purposes of this subsection, "financial
      institution" means the same as defined in section 527.2.
         84. a.  Subject to paragraph "b", the sales price from the
      sale or furnishing of metered gas, electricity, and fuel, including
      propane and heating oil, to residential customers which is used to
      provide energy for residential dwellings and units of apartment and
      condominium complexes used for human occupancy.
         b.  The exemption in this subsection shall be phased in by
      means of a reduction in the tax rate as follows:
         (1)  If the date of the utility billing or meter reading cycle of
      the residential customer for the sale or furnishing of metered gas
      and electricity is on or after January 1, 2004, through December 31,
      2004, or if the sale or furnishing of fuel for purposes of
      residential energy and the delivery of the fuel occurs on or after
      January 1, 2004, through December 31, 2004, the rate of tax is two
      percent of the sales price.
         (2)  If the date of the utility billing or meter reading cycle of
      the residential customer for the sale or furnishing of metered gas
      and electricity is on or after January 1, 2005, through December 31,
      2005, or if the sale or furnishing of fuel for purposes of
      residential energy and the delivery of the fuel occurs on or after
      January 1, 2005, through December 31, 2005, the rate of tax is one
      percent of the sales price.
         (3)  If the date of the utility billing or meter reading cycle of
      the residential customer for the sale or furnishing of metered gas
      and electricity is on or after January 1, 2006, or if the sale,
      furnishing, or service of fuel for purposes of residential energy and
      the delivery of the fuel occurs on or after January 1, 2006, the rate
      of tax is zero percent of the sales price.
         c.  The exemption in this subsection does not apply to local
      option sales and services tax imposed pursuant to chapters 423B and
      423E.
         85.  The sales price from the sale of the following items:
      self-propelled building equipment, pile drivers, motorized
      scaffolding, or attachments customarily drawn or attached to
      self-propelled building equipment, pile drivers, and motorized
      scaffolding, including auxiliary attachments which improve the
      performance, safety, operation, or efficiency of the equipment, and
      replacement parts and are directly and primarily used by contractors,
      subcontractors, and builders for new construction, reconstruction,
      alterations, expansion, or remodeling of real property or structures.

         86.  The sales price from services performed on a vessel if all of
      the following apply:
         a.  The vessel is a licensed vessel under the laws of the
      United States coast guard.
         b.  The service is used to repair or restore a defect in the
      vessel.
         c.  The vessel is engaged in interstate commerce and will
      continue in interstate commerce once the repairs or restoration is
      completed.
         d.  The vessel is in navigable water that borders a boundary
      of this state.
         For purposes of this exemption, "vessel" includes a ship,
      barge, or other waterborne vessel.
         87.  The sales price from the sales of toys to a nonprofit
      organization exempt from federal income tax under section 501 of the
      Internal Revenue Code that purchases the toys from donations
      collected by the nonprofit organization and distributes the toys to
      children at no cost.
         88.  The sales price from the sale of building materials,
      supplies, goods, wares, or merchandise sold to a nonprofit Iowa
      affiliate of a nonprofit international organization whose primary
      activity is the promotion of the construction, remodeling, or
      rehabilitation of one-family or two-family dwellings for use by
      low-income families and where the building materials, supplies,
      goods, wares, or merchandise are used in the construction,
      remodeling, or rehabilitation of such dwellings.
         89. a.  The sales price of all goods, wares, or merchandise
      sold, or of services furnished, which are used in the fulfillment of
      a written construction contract for the original construction of a
      building or structure to be used as a collaborative educational
      facility.
         b.  The sales price of all goods, wares, or merchandise sold,
      or of services furnished, which are used in the fulfillment of a
      written construction contract for the construction of additions or
      modifications to a building or structure used as part of a
      collaborative educational facility.
         c.  To receive the exemption provided in paragraph "a" or
      "b", a collaborative educational facility must meet all of the
      criteria in paragraph "d" or "e":
         d. (1)  The contract for construction of the building or
      structure is entered into on or after April 1, 2003.
         (2)  The building or structure is located within the corporate
      limits of a city in the state with a population in excess of one
      hundred ninety-five thousand residents.
         (3)  The sole purpose of the building or structure is to provide
      facilities for a collaborative of public and private educational
      institutions that provide education to students.
         (4)  The owner of the building or structure is a nonprofit
      corporation governed by chapter 504 or former chapter 504A which is
      exempt from federal income tax pursuant to section 501(a) of the
      Internal Revenue Code.
         e. (1)  The contract for construction of the building or
      structure is entered into on or after May 15, 2007.
         (2)  The sole purpose of the building or structure is to provide
      facilities for a regional academy under a collaborative of public and
      private educational institutions that includes a community college
      established under chapter 260C that provide education to students.
         (3)  The owner of the building or structure is a qualified
      charitable nonprofit corporation governed by chapter 504 or former
      chapter 504A which is exempt from federal income tax pursuant to
      section 501(c)(3) of the Internal Revenue Code.
         f.  References to "building" or "structure" in
      paragraphs "d" and "e" include any additions or modifications
      to the building or structure.
         90.  The sales price from the sale of solar energy equipment.  For
      purposes of this subsection, "solar energy equipment" means
      equipment that is primarily used to collect and convert incident
      solar radiation into thermal, mechanical, or electrical energy or
      equipment that is primarily used to transform such converted solar
      energy to a storage point or to a point of use.
         91. a.  The sales price from the sale of coins, currency, or
      bullion.
         b.  For purposes of this subsection:
         (1)  "Bullion" means bars, ingots, or commemorative medallions
      of gold, silver, platinum, palladium, or a combination of these where
      the value of the metal depends on its content and not the form.
         (2)  "Coins" or "currency" means a coin or currency made
      of gold, silver, or other metal or paper which is or has been used as
      legal tender.
         92. a. (1)  The sales price from the sale or rental of
      computers and equipment that are necessary for the maintenance and
      operation of a web search portal and property whether directly or
      indirectly connected to the computers, including but not limited to
      cooling systems, cooling towers, and other temperature control
      infrastructure; power infrastructure for transformation,
      distribution, or management of electricity used for the maintenance
      and operation of the web search portal, including but not limited to
      exterior dedicated business-owned substations, back-up power
      generation systems, battery systems, and related infrastructure; and
      racking systems, cabling, and trays, which are necessary for the
      maintenance and operation of the web search portal.
         (2)  The sales price of back-up power generation fuel, that is
      purchased by a web search portal business for use in the items listed
      in subparagraph (1).
         (3)  The sales price of electricity purchased for use in providing
      a web search portal.
         b.  For the purpose of claiming this exemption, all of the
      following requirements shall be met:
         (1)  The business of the purchaser or renter shall be as a
      provider of a web search portal.
         (2)  The web search portal business shall have a physical location
      in the state that is used for the operations and maintenance of the
      web search portal site on the internet including but not limited to
      research and development to support capabilities to organize
      information and to provide internet access, navigation, and search.
         (3)  The web search portal business shall make a minimum
      investment in an Iowa physical location of two hundred million
      dollars within the first six years of operation in Iowa beginning
      with the date the web search portal business initiates site
      preparation activities.  The minimum investment includes the initial
      investment, including land and subsequent acquisition of additional
      adjacent land and subsequent investment at the Iowa location.
         (4)  The web search portal business shall purchase, option, or
      lease Iowa land not later than December 31, 2008, for any initial
      investment.  However, the December 31, 2008, date shall not affect
      the future purchases of adjacent land and additional investment in
      the initial or adjacent land to qualify as part of the minimum
      investment for purposes of this exemption.
         c.  This exemption applies from the date of the initial
      investment in or the initiation of site preparation activities for
      the web search portal facility as described in paragraph "b".
      For purposes of claiming this exemption, the requirements may be met
      by aggregating the various Iowa investments and other requirements of
      the web search portal business's affiliates.  This exemption applies
      to affiliates of the web search portal business.
         d.  Failure to meet eighty percent of the minimum investment
      amount requirement specified in paragraph "b" within the first
      six years of operation from the date the web search portal business
      initiates site preparation activities will result in the web search
      portal business losing the right to claim this exemption and the web
      search portal business shall pay all sales or use tax that would have
      been due on the purchase or rental or use of the items listed in this
      exemption, plus any applicable penalty and interest imposed by
      statute.
         e.  For purposes of this subsection:
         (1)  "Affiliate" means an entity that directly or indirectly
      controls, is controlled with or by, or is under common control with
      another entity.
         (2)  "Control" means any of the following:
         (a)  In the case of a United States corporation, the ownership,
      directly or indirectly, of fifty percent or more of the voting power
      to elect directors.
         (b)  In the case of a foreign corporation, if the voting power to
      elect the directors is less than fifty percent, the maximum amount
      allowed by applicable law.
         (c)  In the case of an entity other than a corporation, fifty
      percent or more ownership interest in the entity, or the power to
      direct the management of the entity.
         (3)  "Web search portal business" means an entity among whose
      primary businesses is to provide a search portal to organize
      information; to access, search, and navigate the internet, including
      research and development to support capabilities to organize
      information; and to provide internet access, navigation, and search
      functionalities.
         93. a. (1)  The sales price from the sale or rental of
      computers and equipment that are necessary for the maintenance and
      operation of a web search portal business and property whether
      directly or indirectly connected to the computers, including but not
      limited to cooling systems, cooling towers, and other temperature
      control infrastructure; power infrastructure for transformation,
      distribution, or management of electricity used for the maintenance
      and operation of the web search portal business, including but not
      limited to exterior dedicated business-owned substations, back-up
      power generation systems, battery systems, and related
      infrastructure; and racking systems, cabling, and trays, which are
      necessary for the maintenance and operation of the web search portal
      business.
         (2)  The sales price of back-up power generation fuel, that is
      purchased by a web search portal business for use in the items listed
      in subparagraph (1).
         (3)  The sales price of electricity purchased for use by a web
      search portal business.
         b.  For the purpose of claiming this exemption, all of the
      following requirements shall be met:
         (1)  The purchaser or renter shall be a web search portal
      business.
         (2)  The web search portal business shall have a physical location
      in the state that is used for the operations and maintenance of the
      web search portal business.
         (3)  The web search portal business shall make a minimum
      investment in an Iowa physical location of two hundred million
      dollars within the first six years of operation in Iowa beginning
      with the date the web search portal business initiates site
      preparation activities.  The minimum investment includes the initial
      investment, including land and subsequent acquisition of additional
      adjacent land and subsequent investment at the Iowa location.
         (4)  The web search portal business shall purchase, option, or
      lease Iowa land not later than December 31, 2008, for any initial
      investment.  However, the December 31, 2008, date shall not affect
      the future purchases of adjacent land and additional investment in
      the initial or adjacent land to qualify as part of the minimum
      investment for purposes of this exemption.
         c.  This exemption applies from the date of the initial
      investment in or the initiation of site preparation activities for
      the web search portal facility as described in paragraph "b".
      For purposes of claiming this exemption, the requirements may be met
      by aggregating the various Iowa investments and other requirements of
      the web search portal business's affiliates.  This exemption applies
      to affiliates of the web search portal business.
         d.  Failure to meet eighty percent of the minimum investment
      amount requirement specified in paragraph "b" within the first
      six years of operation from the date the web search portal business
      initiates site preparation activities will result in the web search
      portal business losing the right to claim this web search portal
      business exemption and the web search portal business shall pay all
      sales or use tax that would have been due on the purchase or rental
      or use of the items listed in this exemption, plus any applicable
      penalty and interest imposed by statute.
         e.  For purposes of this subsection:
         (1)  "Affiliate" means an entity that directly or indirectly
      controls, is controlled with or by, or is under common control with
      another entity.
         (2)  "Control" means any of the following:
         (a)  In the case of a United States corporation, the ownership,
      directly or indirectly, of fifty percent or more of the voting power
      to elect directors.
         (b)  In the case of a foreign corporation, if the voting power to
      elect the directors is less than fifty percent, the maximum amount
      allowed by applicable law.
         (c)  In the case of an entity other than a corporation, fifty
      percent or more ownership interest in the entity, or the power to
      direct the management of the entity.
         (3)  "Web search portal business" means an entity whose
      business among other businesses is to provide a search portal to
      organize information; to access, search, and navigate the internet,
      including research and development to support capabilities to
      organize information; or to provide internet access, navigation, or
      search functionalities.
         94.  Water use permit fees paid pursuant to section 455B.265.
         95. a. (1)  The sales price from the sale or rental of
      computers and equipment that are necessary for the maintenance and
      operation of a data center business and property whether directly or
      indirectly connected to the computers, including but not limited to
      cooling systems, cooling towers, and other temperature control
      infrastructure; power infrastructure for transformation,
      distribution, or management of electricity used for the maintenance
      and operation of the data center business, including but not limited
      to exterior dedicated business-owned substations, backup power
      generation systems, battery systems, and related infrastructure; and
      racking systems, cabling, and trays, which are necessary for the
      maintenance and operation of the data center business.
         (2)  The sales price of backup power generation fuel that is
      purchased by a data center business for use in the items listed in
      subparagraph (1).
         (3)  The sales price of electricity purchased for use by a data
      center business.
         b.  For the purpose of claiming this exemption, all of the
      following requirements shall be met:
         (1)  The purchaser or renter shall be a data center business.
         (2)  The data center business shall have a physical location in
      the state that is, in the aggregate, at least five thousand square
      feet in size that is used for the operations and maintenance of the
      data center business.
         (3)  The data center business shall make a minimum investment in
      an Iowa physical location of two hundred million dollars within the
      first six years of operation in Iowa beginning with the date the data
      center business initiates site preparation activities.  The minimum
      investment includes the initial investment, including land and
      subsequent acquisition of additional adjacent land and subsequent
      investment at the Iowa location.
         (4)  The data center business shall comply with the sustainable
      design and construction standards established by the state building
      code commissioner pursuant to section 103A.8B.
         c.  This exemption applies from the date of the initial
      investment in or the initiation of site preparation activities for
      the data center business facility as described in paragraph "b".

         d.  Failure to meet eighty percent of the minimum investment
      amount requirement specified in paragraph "b" within the first
      six years of operation from the date the data center business
      initiates site preparation activities will result in the data center
      business losing the right to claim this data center business
      exemption and the data center business shall pay all sales or use tax
      that would have been due on the purchase or rental or use of the
      items listed in this exemption, plus any applicable penalty and
      interest imposed by statute.
         e.  For purposes of this subsection:
         (1)  "Data center" means a building rehabilitated or
      constructed to house a group of networked server computers in one
      physical location in order to centralize the storage, management, and
      dissemination of data and information pertaining to a particular
      business, taxonomy, or body of knowledge.  A data center business's
      facility typically includes the mechanical and electrical systems,
      redundant or backup power supplies, redundant data communications
      connections, environmental controls, and fire suppression systems.  A
      data center business's facility also includes a restricted access
      area employing advanced physical security measures such as video
      surveillance systems and card-based security or biometric security
      access systems.
         (2)  "Data center business" means an entity whose business
      among other businesses, is to operate a data center.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §96, 205; 2004 Acts, ch 1022, §4; 2004
      Acts, ch 1049, §191; 2004 Acts, ch 1073, §26, 27; 2004 Acts, ch 1086,
      §105; 2004 Acts, ch 1133, §1; 2004 Acts, ch 1175, §320, 394; 2005
      Acts, ch 71, §1; 2005 Acts, ch 134, §1; 2005 Acts, ch 140, §6--11,
      16, 30, 44--46, 72, 73; 2006 Acts, ch 1001, §1, 2, 4, 5; 2006 Acts,
      ch 1134, §1; 2006 Acts, ch 1158, §40--44; 2006 Acts, ch 1161, §5, 7;
      2006 Acts, ch 1162, §1; 2006 Acts, ch 1185, §128; 2007 Acts, ch 22,
      §74, 75; 2007 Acts, ch 186, §21, 22; 2007 Acts, ch 199, §1; 2007
      Acts, ch 215, §112, 125; 2008 Acts, ch 1006, §1; 2008 Acts, ch 1163,
      §1; 2008 Acts, ch 1184, §55, 56; 2009 Acts, ch 133, §144; 2009 Acts,
      ch 179, §136, 197, 218--220
         Referred to in § 15A.9, 321.105A, 423.1, 423.2, 423.4, 423.6,
      423.33, 423C.3, 423D.3, 427.1(35a, 35b, 36a, 36b, 37a), 476B.4

Footnotes

         Former § 423.3 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, §151, 205
         2005 amendments to subsections 2, 37, and 49 take effect June 3,
      2005, and apply retroactively to July 1, 2004; 2005 Acts, ch 140, §16

         2005 amendment to subsection 5 takes effect June 3, 2005, and
      applies retroactively to January 1, 1998; limitations on total
      refunds; filing deadline; proration of refund amounts; 2005 Acts, ch
      140, §72, 73; 2006 Acts, ch 1158, §66, 69
         2006 amendment to subsection 11 takes effect June 2, 2006, and
      applies retroactively to January 1, 1992; for sales occurring before
      June 2, 2006, refunds limited to $25,000 in the aggregate and not
      allowed unless claims are filed prior to October 1, 2006; 2006 Acts,
      ch 1161, §6, 7
         For claims arising under subsection 89, paragraph d, for original
      construction projects occurring between April 1, 2003, and June 30,
      2005, refunds not allowed unless claims are filed by June 30, 2006;
      2006 Acts, ch 1001, §4, 5
         For claims arising under subsection 89, paragraph e, for original
      construction projects occurring between May 15, 2007, and June 30,
      2007, refunds not allowed unless claims are filed by October 1, 2007;
      2007 Acts, ch 215, §125
         2009 amendment to subsection 78 takes effect May 26, 2009, and
      applies retroactively to July 1, 1998; October 1, 2009, filing
      deadline and limitation on claims resulting from transactions
      occurring between July 1, 1998, and May 26, 2009; 2009 Acts, ch 179,
      §219, 220
        423.4  REFUNDS.
         1.  A private nonprofit educational institution in this state,
      nonprofit Iowa affiliate of a nonprofit international organization
      whose primary activity is the promotion of the construction,
      remodeling, or rehabilitation of one-family or two-family dwellings
      for low-income families, nonprofit private museum in this state,
      tax-certifying or tax-levying body or governmental subdivision of the
      state, including the state board of regents, state department of
      human services, state department of transportation, a municipally
      owned solid waste facility which sells all or part of its processed
      waste as fuel to a municipally owned public utility, and all
      divisions, boards, commissions, agencies, or instrumentalities of
      state, federal, county, or municipal government which do not have
      earnings going to the benefit of an equity investor or stockholder,
      may make application to the department for the refund of the sales or
      use tax upon the sales price of all sales of goods, wares, or
      merchandise, or from services furnished to a contractor, used in the
      fulfillment of a written contract with the state of Iowa, any
      political subdivision of the state, or a division, board, commission,
      agency, or instrumentality of the state or a political subdivision, a
      private nonprofit educational institution in this state, a nonprofit
      Iowa affiliate described in this subsection, or a nonprofit private
      museum in this state if the property becomes an integral part of the
      project under contract and at the completion of the project becomes
      public property, is devoted to educational uses, becomes part of a
      low-income one-family or two-family dwelling in the state, or becomes
      a nonprofit private museum; except goods, wares, or merchandise, or
      services furnished which are used in the performance of any contract
      in connection with the operation of any municipal utility engaged in
      selling gas, electricity, or heat to the general public or in
      connection with the operation of a municipal pay television system;
      and except goods, wares, and merchandise used in the performance of a
      contract for a "project" under chapter 419 as defined in that
      chapter other than goods, wares, or merchandise used in the
      performance of a contract for a "project" under chapter 419 for
      which a bond issue was approved by a municipality prior to July 1,
      1968, or for which the goods, wares, or merchandise becomes an
      integral part of the project under contract and at the completion of
      the project becomes public property or is devoted to educational
      uses.
         a.  Such contractor shall state under oath, on forms provided
      by the department, the amount of such sales of goods, wares, or
      merchandise, or services furnished and used in the performance of
      such contract, and upon which sales or use tax has been paid, and
      shall file such forms with the governmental unit, private nonprofit
      educational institution, nonprofit Iowa affiliate, or nonprofit
      private museum which has made any written contract for performance by
      the contractor.  The forms shall be filed by the contractor with the
      governmental unit, educational institution, nonprofit Iowa affiliate,
      or nonprofit private museum before final settlement is made.
         b.  Such governmental unit, educational institution, nonprofit
      Iowa affiliate, or nonprofit private museum shall, not more than one
      year after the final settlement has been made, make application to
      the department for any refund of the amount of the sales or use tax
      which shall have been paid upon any goods, wares, or merchandise, or
      services furnished, the application to be made in the manner and upon
      forms to be provided by the department, and the department shall
      forthwith audit the claim and, if approved, issue a warrant to the
      governmental unit, educational institution, nonprofit Iowa affiliate,
      or nonprofit private museum in the amount of the sales or use tax
      which has been paid to the state of Iowa under the contract.
         c.  Refunds authorized under this subsection shall accrue
      interest at the rate in effect under section 421.7 from the first day
      of the second calendar month following the date the refund claim is
      received by the department.
         d.  Any contractor who willfully makes a false report of tax
      paid under the provisions of this subsection is guilty of a simple
      misdemeanor and in addition shall be liable for the payment of the
      tax and any applicable penalty and interest.
         2.  The refund of sales and use tax paid on transportation
      construction projects let by the state department of transportation
      is subject to the special provisions of this subsection.
         a.  A contractor awarded a contract for a transportation
      construction project is considered the consumer of all building
      materials, building supplies, and equipment and shall pay sales tax
      to the supplier or remit consumer use tax directly to the department.

         b.  The contractor is not required to file information with
      the state department of transportation stating the amount of goods,
      wares, or merchandise, or services rendered, furnished, or performed
      and used in the performance of the contract or the amount of sales or
      use tax paid.
         c.  The state department of transportation shall file a refund
      claim based on a formula that considers the following:
         (1)  The quantity of material to complete the contract, and
      quantities of items of work.
         (2)  The estimated cost of these materials included in the items
      of work, and the state sales or use tax to be paid on the tax rate in
      effect in section 423.2.  The quantity of materials shall be
      determined after each letting based on the contract quantities of all
      items of work let to contract.  The quantity of individual component
      materials required for each item shall be determined and maintained
      in a database.  The total quantities of materials shall be determined
      by multiplying the quantities of component materials for each
      contract item of work by the total quantities of each contract item
      for each letting.  Where variances exist in the cost of materials,
      the lowest cost shall be used as the base cost.
         d.  Only the state sales or use tax is refundable.  Local
      option taxes paid by the contractor are not refundable.
         3.  A relief agency may apply to the director for refund of the
      amount of sales or use tax imposed and paid upon sales to it of any
      goods, wares, merchandise, or services furnished, used for free
      distribution to the poor and needy.
         a.  The refunds may be obtained only in the following amounts
      and manner and only under the following conditions:
         (1)  On forms furnished by the department, and filed within the
      time as the director shall provide by rule, the relief agency shall
      report to the department the total amount or amounts, valued in
      money, expended directly or indirectly for goods, wares, merchandise,
      or services furnished, used for free distribution to the poor and
      needy.
         (2)  On these forms the relief agency shall separately list the
      persons making the sales to it or to its order, together with the
      dates of the sales, and the total amount so expended by the relief
      agency.
         (3)  The relief agency must prove to the satisfaction of the
      director that the person making the sales has included the amount
      thereof in the computation of the sales price of such person and that
      such person has paid the tax levied by this subchapter or subchapter
      III, based upon such computation of the sales price.
         b.  If satisfied that the foregoing conditions and
      requirements have been complied with, the director shall refund the
      amount claimed by the relief agency.
         4.  A person in possession of a wind energy production tax credit
      certificate pursuant to chapter 476B or a renewable energy tax credit
      certificate issued pursuant to chapter 476C may apply to the director
      for refund of the amount of sales or use tax imposed and paid upon
      purchases made by the applicant.
         a.  The refunds may be obtained only in the following manner
      and under the following conditions:
         (1)  On forms furnished by the department and filed by January 31
      after the end of the calendar year in which the tax credit
      certificate is to be applied, the applicant shall report to the
      department the total amount of sales and use tax paid during the
      reporting period on purchases made by the applicant.
         (2)  The applicant shall separately list the amounts of sales and
      use tax paid during the reporting period.
         (3)  If required by the department, the applicant shall prove that
      the person making the sales has included the amount thereof in the
      computation of the sales price of such person and that such person
      has paid the tax levied by this subchapter or subchapter III, based
      upon such computation of the sales price.
         (4)  The applicant shall provide the tax credit certificates
      issued pursuant to chapter 476B or 476C to the department with the
      forms required by this paragraph "a".
         b.  If satisfied that the foregoing conditions and
      requirements have been complied with, the director shall refund the
      amount claimed by the applicant for an amount not greater than the
      amount of tax credits issued in tax credit certificates pursuant to
      chapter 476B or 476C.
         5. a.  For purposes of this subsection:
         (1)  "Automobile racetrack facility" means a sanctioned
      automobile racetrack facility located as part of a racetrack and
      entertainment complex, including any museum attached to or included
      in the racetrack facility but excluding any restaurant, and which
      facility is located, on a maximum of two hundred thirty-two acres, in
      a city with a population of at least fourteen thousand five hundred
      but not more than sixteen thousand five hundred residents, which city
      is located in a county with a population of at least thirty-five
      thousand but not more than forty thousand residents and where the
      construction on the racetrack facility commenced not later than July
      1, 2006, and the cost of the construction upon completion was at
      least thirty-five million dollars.
         (2)  "Change of control" means any of the following:
         (a)  Any change in the ownership of the original or any subsequent
      legal entity that is the owner or operator of the automobile
      racetrack facility such that less than twenty-five percent of the
      equity interests in the legal entity is owned by individuals who are
      residents of Iowa, an Iowa corporation, or combination of both.
         (b)  The original owners of the legal entity that is the owner or
      operator of the automobile racetrack facility shall collectively
      cease to own at least twenty-five percent of the voting equity
      interests of such legal entity.
         (3)  "Iowa corporation" means a corporation incorporated under
      the laws of Iowa where at least twenty-five percent of the
      corporation's equity interests are owned by individuals who are
      residents of Iowa.
         (4)  "Owner or operator" means a for-profit legal entity where
      at least twenty-five percent of its equity interests are owned by
      individuals who are residents of Iowa, an Iowa corporation, or
      combination of both and that is the owner or operator of an
      automobile racetrack facility and is primarily a promoter of motor
      vehicle races.
         (5)  "Population" means the population based upon the 2000
      certified federal census.
         b.  The owner or operator of an automobile racetrack facility
      may apply to the department for a rebate of sales tax imposed and
      collected by retailers upon sales of tangible personal property or
      services furnished to purchasers at the automobile racetrack
      facility.
         c.  The rebate may be obtained only in the following amounts
      and manner and only under the following conditions:
         (1)  On forms furnished by the department within the time period
      provided by the department by rule, which time period shall not be
      longer than quarterly.
         (2)  The owner or operator shall provide information as deemed
      necessary by the department.
         (3)  The transactions for which sales tax was collected and the
      rebate is sought occurred on or after January 1, 2006, but before
      January 1, 2016.  However, not more than twelve million five hundred
      thousand dollars in total rebates shall be provided pursuant to this
      subsection.
         (4)  Notwithstanding subparagraph (3), the rebate of sales tax
      shall cease for transactions occurring on or after the date of the
      change of control of the automobile racetrack facility.
         (5)  The automobile racetrack facility has not received or shall
      not receive any grants under the community attraction and tourism
      program pursuant to chapter 15F, subchapter II, or the vision Iowa
      program pursuant to chapter 15F, subchapter III.
         d.  To assist the department in determining the amount of the
      rebate, the owner or operator shall identify to the department
      retailers located at the automobile racetrack facility who will be
      collecting sales tax.  The department shall verify such identity and
      ensure that all proper permits have been issued.  For purposes of
      this subsection, advance ticket and admissions sales shall be
      considered occurring at the automobile racetrack facility regardless
      of where the transactions actually occur.
         e.  Upon determining that the conditions and requirements of
      this subsection and the department are met, the department shall
      issue a warrant to the owner or operator in the amount equal to the
      amount claimed and verified by the department.
         f.  Notwithstanding the state sales tax imposed in section
      423.2, a rebate issued pursuant to this subsection shall not exceed
      an amount equal to five percent of the sales price of the tangible
      personal property or services furnished to purchasers at the
      automobile racetrack facility.  Any local option taxes paid and
      collected shall not be subject to rebate under this subsection.
         g.  This subsection is repealed June 30, 2016, or thirty days
      following the date on which twelve million five hundred thousand
      dollars in total rebates have been provided, or thirty days following
      the date on which rebates cease as provided in paragraph "c",
      subparagraph (4), whichever is the earliest.
         6. a. (1)  The owner of a collaborative educational facility
      in this state may make application to the department for the refund
      of the sales or use tax upon the sales price of all sales of goods,
      wares, or merchandise, or from services furnished to a contractor,
      used in the fulfillment of a written construction contract with the
      owner of the collaborative educational facility for the original
      construction, or additions or modifications to, a building or
      structure to be used as part of the collaborative educational
      facility.
         (2)  To receive the refund under this subsection, a collaborative
      educational facility must meet all of the following criteria:
         (a)  The contract for construction of the building or structure is
      entered into on or after April 1, 2003.
         (b)  The building or structure is located within the corporate
      limits of a city in the state with a population in excess of one
      hundred ninety-five thousand residents.
         (c)  The sole purpose of the building or structure is to provide
      facilities for a collaborative of public and private educational
      institutions that provide education to students.
         (d)  The owner of the building or structure is a nonprofit
      corporation governed by chapter 504 or former chapter 504A which is
      exempt from federal income tax pursuant to section 501(a) of the
      Internal Revenue Code.
         (3)  References to "building" or "structure" in
      subparagraph (2), subparagraph divisions (a) through (d) include any
      additions or modifications to the building or structure.
         b.  Such contractor shall state under oath, on forms provided
      by the department, the amount of such sales of goods, wares, or
      merchandise, or services furnished and used in the performance of
      such contract, and upon which sales or use tax has been paid, and
      shall file such forms with the owner of the collaborative educational
      facility which has made any written contract for performance by the
      contractor.
         c.  The owner of the collaborative educational facility shall,
      not more than one year after the final settlement has been made, make
      application to the department for any refund of the amount of the
      sales or use tax which shall have been paid upon any goods, wares, or
      merchandise, or services furnished, the application to be made in the
      manner and upon forms to be provided by the department, and the
      department shall forthwith audit the claim and, if approved, issue a
      warrant to the owner of the collaborative educational facility in the
      amount of the sales or use tax which has been paid to the state of
      Iowa under the contract.
         Refunds authorized under this subsection shall accrue interest at
      the rate in effect under section 421.7 from the first day of the
      second calendar month following the date the refund claim is received
      by the department.
         d.  Any contractor who willfully makes a false report of tax
      paid under the provisions of this subsection is guilty of a simple
      misdemeanor and in addition shall be liable for the payment of the
      tax and any applicable penalty and interest.
         7. a.  The owner of a data center business, as defined in
      section 423.3, subsection 95, located in this state may make an
      annual application for up to five consecutive years to the department
      for the refund of fifty percent of the sales or use tax upon the
      sales price of all sales of fuel used in creating heat, power, and
      steam for processing or generating electrical current, or from the
      sale of electricity consumed by computers, machinery, or other
      equipment for operation of the data center business facility.
         b.  A data center business shall qualify for the refund in
      this subsection if all of the following criteria are met:
         (1)  The data center business shall make an investment in an Iowa
      physical location within the first three years of operation in Iowa
      beginning with the date on which the data center business initiates
      site preparation activities.
         (2)  The amount of the investment in an Iowa physical location,
      including the value of a lease agreement, or an investment in land or
      buildings, and the capital expenditures for computers, machinery, and
      other equipment used in the operation of the data center business
      shall equal at least one million dollars, but shall not exceed ten
      million dollars for a newly constructed building or five million
      dollars for a rehabilitated building.
         (3)  If the data center business is leasing a building to house
      operations, the data center business shall enter into a lease that is
      at least five years in duration.
         (4)  The data center business shall comply with the sustainable
      design and construction standards established by the state building
      code commissioner pursuant to section 103A.8B.
         c.  The refund may be obtained only in the following manner
      and under the following conditions:
         (1)  The applicant shall use forms furnished by the department.
         (2)  The applicant shall separately list the amounts of sales and
      use tax paid during the reporting period.
         (3)  The applicant may request when the refund begins, but it must
      start on the first day of a month and proceed for a continuous
      twelve-month period.
         d.  In determining the amount to be refunded, if the dates of
      the utility billing or meter reading cycle for the sale or furnishing
      of metered gas and electricity are on or after the first day of the
      first month through the last day of the last month of the refund
      year, fifty percent of the amount of tax charged in the billings
      shall be refunded.  In determining the amount to be refunded, if the
      dates of the sale or furnishing of fuel for purposes of commercial
      energy and the delivery of the fuel are on or after the first day of
      the first month through the last day of the last month of the refund
      year, fifty percent of the amount of tax charged in the billings
      shall be refunded.
         e.  To receive refunds during the five-year period, the
      applicant shall file a refund claim within three months after the end
      of each refund year.
         f.  The refund in this subsection applies only to state sales
      and use tax paid and does not apply to local option sales and
      services taxes imposed pursuant to chapter 423B.  Notwithstanding the
      state sales tax imposed in section 423.2, a refund issued pursuant to
      this section shall not exceed an amount equal to five percent of the
      sales price of the fuel used to create heat, power, and steam for
      processing or generating electrical current or from the sale price of
      electricity consumed by computers, machinery, or other equipment for
      operation of the data center business facility.
         8. a.  The owner of a data center business, as defined in
      section 423.3, subsection 95, paragraph "e", located in this
      state that is not eligible for the exemption under section 423.3,
      subsection 95, may make an annual application to the department for
      the refund of fifty percent of the sales or use tax upon all of the
      following:
         (1)  The sales price from the sale or rental of computers and
      equipment that are necessary for the maintenance and operation of a
      data center business and property whether directly or indirectly
      connected to the computers, including but not limited to cooling
      systems, cooling towers, and other temperature control
      infrastructure; power infrastructure for transformation,
      distribution, or management of electricity used for the maintenance
      and operation of the data center business including but not limited
      to exterior dedicated business-owned substations, backup power
      generation systems, battery systems, and related infrastructure; and
      racking systems, cabling, and trays, which are necessary for the
      maintenance and operation of the data center business.
         (2)  The sales price of backup power generation fuel that is
      purchased by a data center business for use in the items listed in
      subparagraph (1).
         (3)  The sales price of electricity purchased for use in providing
      data center services.
         b.  A data center business shall qualify for the partial
      refund in this subsection if all of the following criteria are met:
         (1)  The data center business shall have a physical location in
      the state which is at least five thousand square feet in size.
         (2)  The data center business shall make a minimum investment of
      at least ten million dollars, in the case of new construction, or at
      least five million dollars in the case of a rehabilitated building,
      in an Iowa physical location within the first six years of operation
      in Iowa, beginning with the date on which the data center business
      initiates site preparation activities.  The minimum investment
      includes the initial investment, including the value of a lease
      agreement or the amount invested in land and subsequent acquisition
      of additional adjacent land and subsequent investment at the Iowa
      location.
         (3)  If the data center business is leasing a building to house
      operations, the data center business shall enter into a lease that is
      at least five years in duration.
         (4)  The data center business shall comply with the sustainable
      design and construction standards established by the state building
      code commissioner pursuant to section 103A.8B.
         c.  The refund allowed under this subsection shall be
      available for the following periods of time:
         (1)  For an investment of at least ten million dollars, in the
      case of new construction, or at least five million dollars, in the
      case of a rehabilitated building, but less than one hundred
      thirty-six million dollars, ten years.
         (2)  For an investment of at least one hundred thirty-six million
      dollars, but less than two hundred million dollars, seven years.
         d.  The refund may be obtained only in the following manner
      and under the following conditions:
         (1)  The applicant shall use forms furnished by the department.
         (2)  The applicant shall separately list the amounts of sales and
      use tax paid during the reporting period.
         (3)  The applicant may request when the refund begins, but it must
      start on the first day of a month and proceed for a continuous
      twelve-month period.
         e.  In determining the amount to be refunded, if the dates of
      the utility billing or meter reading cycle for the sale or furnishing
      of metered gas and electricity are on or after the first day of the
      first month through the last day of the last month of the refund
      year, fifty percent of the amount of tax charged in the billings
      shall be refunded.  In determining the amount to be refunded, if the
      dates of the sale or furnishing of fuel for purposes of commercial
      energy and the delivery of the fuel are on or after the first day of
      the first month through the last day of the last month of the refund
      year, fifty percent of the amount of tax charged in the billings
      shall be refunded.
         f.  To receive refunds during the applicable refund period,
      the applicant shall file a refund claim within three months after the
      end of each refund year.
         g.  The refund in this subsection applies only to state sales
      and use tax paid and does not apply to local option sales and
      services taxes imposed pursuant to chapter 423B.  Notwithstanding the
      state sales tax imposed in section 423.2, a refund issued pursuant to
      this section shall not exceed an amount equal to five percent of the
      sales price of the items listed in paragraph "a", subparagraphs
      (1), (2), and (3).

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §97, 205; 2005 Acts, ch 110, §2; 2005
      Acts, ch 134, §2; 2005 Acts, ch 160, §4, 14; 2006 Acts, ch 1001, §3;
      2006 Acts, ch 1136, §3; 2006 Acts, ch 1185, §128; 2007 Acts, ch 126,
      §69; 2007 Acts, ch 199, §2; 2008 Acts, ch 1004, §3, 7; 2008 Acts, ch
      1032, §52; 2008 Acts, ch 1128, §2, 15; 2009 Acts, ch 41, §253; 2009
      Acts, ch 60, §7; 2009 Acts, ch 179, §39, 198, 199, 202, 211, 212
         Referred to in § 357A.15, 423.3, 476B.8, 476C.6

Footnotes

         Former § 423.4 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, § 151, 205
         2008 amendment to subsection 4 takes effect May 1, 2008, and
      applies retroactively to tax years beginning on or after January 1,
      2008; 2008 Acts, ch 1128, §15
         2009 amendments to subsection 7 and amendment adding subsection 8
      apply to sales and use tax paid on or after July 1, 2009; 2009 Acts,
      ch 179, §202
        423.5  IMPOSITION OF TAX.
         Except as provided in subsection 3, an excise tax at the rate of
      six percent of the purchase price or installed purchase price is
      imposed on the following:
         1.  The use in this state of tangible personal property as defined
      in section 423.1, including aircraft subject to registration under
      section 328.20, purchased for use in this state.  For the purposes of
      this subchapter, the furnishing or use of the following services is
      also treated as the use of tangible personal property:  optional
      service or warranty contracts, except residential service contracts
      regulated under chapter 523C, vulcanizing, recapping, or retreading
      services, engraving, photography, retouching, printing, or binding
      services, and communication service when furnished or delivered to
      consumers or users within this state.
         2.  The use of manufactured housing in this state, on the purchase
      price if the manufactured housing is sold in the form of tangible
      personal property or on the installed purchase price if the
      manufactured housing is sold in the form of realty.
         3.  An excise tax at the rate of five percent is imposed on the
      use of vehicles subject only to the issuance of a certificate of
      title and the use of manufactured housing, and on the use of leased
      vehicles, if the lease transaction does not require titling or
      registration of the vehicle, on the amount subject to tax as
      calculated pursuant to section 423.26, subsection 2.
         4.  Purchases of tangible personal property made from the
      government of the United States or any of its agencies by ultimate
      consumers shall be subject to the tax imposed by this section.
      Services purchased from the same source or sources shall be subject
      to the service tax imposed by this subchapter and apply to the user
      of the services.
         5.  The use in this state of services enumerated in section 423.2.
      This tax is applicable where services are furnished in this state or
      where the product or result of the service is used in this state.
         6.  The excise tax is imposed upon every person using the property
      within this state until the tax has been paid directly to the county
      treasurer, the state department of transportation, a retailer, or the
      department.  This tax is imposed on every person using the services
      or the product of the services in this state until the user has paid
      the tax either to an Iowa use tax permit holder or to the department.

         7.  For the purpose of the proper administration of the use tax
      and to prevent its evasion, evidence that tangible personal property
      was sold by any person for delivery in this state shall be prima
      facie evidence that such tangible personal property was sold for use
      in this state.
         8.  Any person or that person's affiliate, which is a retailer in
      this state or a retailer maintaining a business in this state under
      this chapter, that enters into a contract with an agency of this
      state must register, collect, and remit Iowa use tax under this
      chapter on all sales of tangible personal property and enumerated
      services.  Every bid submitted and each contract executed by a state
      agency shall contain a certification by the bidder or contractor
      stating that the bidder or contractor is registered with the
      department and will collect and remit Iowa use tax due under this
      chapter.  In the certification, the bidder or contractor shall also
      acknowledge that the state agency may declare the contract or bid
      void if the certification is false.  Fraudulent certification, by act
      or omission, may result in the state agency or its representative
      filing for damages for breach of contract.
         For the purposes of this subsection, "affiliate", "state
      agency", and "voting security" mean the same as defined in
      section 423.2, subsection 10.
         9.  The use tax rate of six percent is reduced to five percent on
      January 1, 2030.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §98, 205; 2005 Acts, ch 140, §47; 2008
      Acts, ch 1113, §112, 124, 129; 2008 Acts, ch 1134, §11, 13; 2008
      Acts, ch 1191, §87
         Referred to in § 29C.15, 123.187, 328.26, 423.14

Footnotes

         Former § 423.5 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, § 151, 205
         Liability for prior use tax, penalty, or interest relating to
      vehicles; 2008 Acts, ch 1113, §130
         Applicability of tax increase to certain sales; refunds to certain
      contractors; 2008 Acts, ch 1134, §35, 36
        423.6  EXEMPTIONS.
         The use in this state of the following tangible personal property
      and services is exempted from the tax imposed by this subchapter:
         1.  Tangible personal property and enumerated services, the sales
      price from the sale of which are required to be included in the
      measure of the sales tax, if that tax has been paid to the department
      or the retailer.  This exemption does not include vehicles subject to
      registration or subject only to the issuance of a certificate of
      title.
         2.  The sale of tangible personal property or the furnishing of
      services in the regular course of business.
         3.  Property used in processing.  The use of property in
      processing within the meaning of this subsection shall mean and
      include any of the following:
         a.  Any tangible personal property including containers which
      it is intended shall, by means of fabrication, compounding,
      manufacturing, or germination, become an integral part of other
      tangible personal property intended to be sold ultimately at retail,
      and containers used in the collection, recovery, or return of empty
      beverage containers subject to chapter 455C.
         b.  Fuel which is consumed in creating power, heat, or steam
      for processing or for generating electric current.
         c.  Chemicals, solvents, sorbents, or reagents, which are
      directly used and are consumed, dissipated, or depleted in processing
      tangible personal property which is intended to be sold ultimately at
      retail, and which may not become a component or integral part of the
      finished product.
         d.  The distribution to the public of free newspapers or
      shoppers guides shall be deemed a retail sale for purposes of the
      processing exemption in this subsection.
         4.  All articles of tangible personal property brought into the
      state of Iowa by a nonresident individual for the individual's use or
      enjoyment while within the state.
         5.  Services exempt from taxation by the provisions of section
      423.3.
         6.  Tangible personal property or services the sales price of
      which is exempt from the sales tax under section 423.3, except
      subsections 39 and 73, as it relates to the sale, but not the lease
      or rental, of vehicles subject only to the issuance of a certificate
      of title and as it relates to aircraft subject to registration under
      section 328.20.
         7.  Advertisement and promotional material and matter, seed
      catalogs, envelopes for same, and other similar material temporarily
      stored in this state which are acquired outside of Iowa and which,
      subsequent to being brought into this state, are sent outside of
      Iowa, either singly or physically attached to other tangible personal
      property sent outside of Iowa.
         8.  Tangible personal property which, by means of fabrication,
      compounding, or manufacturing, becomes an integral part of vehicles,
      as defined in section 321.1, subsections 41, 64A, 71, 85, and 88,
      manufactured for lease and actually leased to a lessee for use
      outside the state of Iowa and the subsequent sole use in Iowa is in
      interstate commerce or interstate transportation.  Vehicles subject
      to registration which are designed primarily for carrying persons are
      excluded from this subsection.
         9.  Mobile homes and manufactured housing the use of which has
      previously been subject to the tax imposed under this subchapter and
      for which that tax has been paid.
         10.  Mobile homes to the extent of the portion of the purchase
      price of the mobile home which is not attributable to the cost of the
      tangible personal property used in the processing of the mobile home,
      and manufactured housing to the extent of the purchase price or the
      installed purchase price of the manufactured housing which is not
      attributable to the cost of the tangible personal property used in
      the processing of the manufactured housing.  For purposes of this
      exemption, the portion of the purchase price which is not
      attributable to the cost of the tangible personal property used in
      the processing of the mobile home is eighty percent and the portion
      of the purchase price or installed purchase price which is not
      attributable to the cost of the tangible personal property used in
      the processing of the manufactured housing is eighty percent.
         11.  Tangible personal property used or to be used as a ship,
      barge, or waterborne vessel which is used or to be used primarily in
      or for the transportation of property or cargo for hire on the rivers
      bordering the state or as materials or parts of such ship, barge, or
      waterborne vessel.
         12.  Aircraft for use in a scheduled interstate federal aviation
      administration certificated air carrier operation.
         13.  Aircraft; tangible personal property permanently affixed or
      attached as a component part of the aircraft, including but not
      limited to repair or replacement materials or parts; and all services
      used for aircraft repair, remodeling, and maintenance services when
      such services are performed on aircraft, aircraft engines, or
      aircraft component materials or parts.  For the purposes of this
      exemption, "aircraft" means aircraft used in a scheduled
      interstate federal aviation administration certificated air carrier
      operation.
         14.  Tangible personal property permanently affixed or attached as
      a component part of the aircraft, including but not limited to repair
      or replacement materials or parts; and all services used for aircraft
      repair, remodeling, and maintenance services when such services are
      performed on aircraft, aircraft engines, or aircraft component
      materials or parts.  For the purposes of this exemption,
      "aircraft" means aircraft used in a nonscheduled interstate
      federal aviation administration certificated air carrier operation
      operating under 14 C.F.R., ch. 1, pt. 135.
         15.  Aircraft sold to an aircraft dealer who in turn rents or
      leases the aircraft if all of the following apply:
         a.  The aircraft is kept in the inventory of the dealer for
      sale at all times.
         b.  The dealer reserves the right to immediately take the
      aircraft from the renter or lessee when a buyer is found.
         c.  The renter or lessee is aware that the dealer will
      immediately take the aircraft when a buyer is found.
         If an aircraft exempt under this subsection is used for any
      purpose other than leasing or renting, or the conditions in
      paragraphs "a", "b", and "c" are not continuously met,
      the dealer claiming the exemption under this subsection is liable for
      the tax that would have been due except for this subsection.  The tax
      shall be computed upon the original purchase price.
         16.  The use in this state of building materials, supplies, or
      equipment, the sale or use of which is not treated as a retail sale
      or a sale at retail under section 423.2, subsection 1.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §99, 205; 2006 Acts, ch 1158, §45, 46;
      2008 Acts, ch 1113, §41, 42; 2008 Acts, ch 1191, §64
         Referred to in § 423C.3

Footnotes

         Former § 423.6 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, § 151, 205
        423.7  TITLE.
         This subchapter shall be known and may be cited as the "Uniform
      Sales and Use Tax Administration Act".

Section History:ecent Form

         2003 Acts, 1st Ex, ch 2, §100, 205

Footnotes

         Former § 423.7 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, § 151, 205
        423.7A  MOTOR VEHICLE LEASE TAX.  Repealed by 2003
      Acts, 1st Ex, ch 2, § 151, 205.  See § 423.26.
        423.8  LEGISLATIVE FINDING AND INTENT.
         The general assembly finds that Iowa should enter into an
      agreement with one or more states to simplify and modernize sales and
      use tax administration in order to substantially reduce the burden of
      tax compliance for all sellers and for all types of commerce.  It is
      the intent of the general assembly that entering into this agreement
      will lead to simplification and modernization of the sales and use
      tax law and not to the imposition of new taxes or an increase or
      decrease in the existing number of exemptions, unless such a result
      is unavoidable under the terms of the agreement.  Entering into this
      agreement should not cause businesses to sustain additional
      administrative burden.
         It is the intent of the general assembly to provide Iowa sellers
      impacted by the agreement with the assistance necessary to alleviate
      administrative burdens that result in participation in the agreement.
      The director and the Iowa streamlined sales tax advisory council
      shall provide recommendations to address the new administrative
      burden identified in the Iowa streamlined sales tax advisory council
      2005 report submitted to the Iowa general assembly.  The
      recommendations must be submitted to the general assembly by January
      1, 2007, and shall include the expenses associated and all relevant
      data including but not limited to the number of intrastate sellers
      impacted by the agreement.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §101, 205; 2006 Acts, ch 1158, §47

Footnotes

         Former § 423.8 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, § 151, 205
        423.9  AUTHORITY TO ENTER AGREEMENT -- REPRESENTATIVES
      ON GOVERNING BOARD.
         1.  The director is authorized and directed to enter into the
      streamlined sales and use tax agreement with one or more states to
      simplify and modernize sales and use tax administration in order to
      substantially reduce the burden of tax compliance for all sellers and
      for all types of commerce.
         2.  The director is further authorized to take other actions
      reasonably required to implement the provisions set forth in this
      chapter.  Other actions authorized by this section include, but are
      not limited to, the adoption of rules and the joint procurement, with
      other member states, of goods and services in furtherance of the
      cooperative agreement.
         3.  Four representatives are authorized to be members of the
      governing board established pursuant to the agreement and to
      represent Iowa before that body as one vote.  The legislator
      representatives shall serve terms as provided in section 69.16B.  The
      representatives shall be appointed as follows:
         a.  One representative shall be a member of the house of
      representatives who is appointed by the speaker of the house of
      representatives or the delegate's designee who shall also be a member
      of the house of representatives.
         b.  One representative shall be a member of the senate who is
      appointed by the majority leader of the senate or the delegate's
      designee who shall also be a member of the senate.
         c.  Two representatives from the executive branch shall be
      appointed by the governor, one of whom shall be the director, or each
      delegate's designee who shall also be employed by the executive
      branch.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §102, 205; 2006 Acts, ch 1158, §48; 2008
      Acts, ch 1156, §46, 58
         Referred to in § 423.9A

Footnotes

         Former § 423.9 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, § 151, 205
        423.9A  IOWA STREAMLINED SALES TAX ADVISORY COUNCIL.

         1.  An Iowa streamlined sales tax advisory council is created.
      The advisory council shall review, study, and submit recommendations
      to the Iowa streamlined sales and use tax representatives appointed
      pursuant to section 423.9, subsection 3, regarding the streamlined
      sales and use tax agreement formalized by the project's member states
      on November 12, 2002, agreement amendments, proposed language
      conforming Iowa's sales and use tax to the national agreement, and
      the following issues:
         a.  Uniform definitions proposed in the current agreement and
      future proposals.
         b.  Effects upon taxability of items newly defined in Iowa.
         c.  Impacts upon business as a result of the agreement.
         d.  Technology implementation issues.
         e.  Any other issues that are brought before the streamlined
      sales and use tax member states or the streamlined sales and use tax
      governing board.
         2.  The department shall provide administrative support to the
      Iowa streamlined sales tax advisory council.  The advisory council
      shall be representative of Iowa's business community and economy when
      reviewing and recommending solutions to streamlined sales and use tax
      issues.  The advisory council shall provide the general assembly and
      the governor with final recommendations made to the Iowa streamlined
      sales and use tax representatives upon the conclusion of each
      calendar year.
         3.  The director, in consultation with the Iowa taxpayers
      association, Iowa retail federation, and the Iowa association of
      business and industry, shall appoint members to the Iowa streamlined
      sales tax advisory council, which shall consist of the following
      members:
         a.  One member from the department.
         b.  Three members representing small Iowa businesses, at least
      one of whom shall be a retailer, and at least one of whom shall be a
      supplier.
         c.  Three members representing medium Iowa businesses, at
      least one of whom shall be a retailer, and at least one of whom shall
      be a supplier.
         d.  Three members representing large Iowa businesses, at least
      one of whom shall be a retailer, and at least one of whom shall be a
      supplier.
         e.  One member representing taxpayers as a whole.
         f.  One member representing the retail community as a whole.
         g.  Any other member representative of business the director
      deems appropriate.

Section History: Recent Form

         2006 Acts, ch 1158, §49; 2007 Acts, ch 22, §76
        423.10  RELATIONSHIP TO STATE LAW.
         Entry into the agreement by the director does not amend or modify
      any law of this state.  Implementation of any condition of the
      agreement in this state, whether adopted before, at, or after
      membership of this state in the agreement, shall be by action of the
      general assembly.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §103, 205

Footnotes

         Former § 423.10 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, § 151, 205
        423.11  AGREEMENT REQUIREMENTS.
         The director shall not enter into the agreement unless the
      agreement requires each state to abide by the following requirements:

         1.  Uniform state rate.  The agreement must set restrictions
      to achieve more uniform state rates through the following:
         a.  Limiting the number of state rates.
         b.  Limiting the application of maximums on the amount of
      state tax that is due on a transaction.
         c.  Limiting the application of thresholds on the application
      of state tax.
         2.  Uniform standards.  The agreement must establish uniform
      standards for the following:
         a.  The sourcing of transactions to taxing jurisdictions.
         b.  The administration of exempt sales.
         c.  The allowances a seller can take for bad debts.
         d.  Sales and use tax returns and remittances.
         3.  Uniform definitions.  The agreement must require states to
      develop and adopt uniform definitions of sales and use tax terms.
      The definitions must enable a state to preserve its ability to make
      policy choices not inconsistent with the uniform definitions.
         4.  Central registration.  The agreement must provide a
      central, electronic registration system that allows a seller to
      register to collect and remit sales and use taxes for all member
      states.
         5.  No nexus attribution.  The agreement must provide that
      registration with the central registration system and the collection
      of sales and use taxes in the member states must not be used as a
      factor in determining whether the seller has nexus with a state for
      any tax.
         6.  Local sales and use taxes.  The agreement must provide for
      reduction of the burdens of complying with local sales and use taxes
      through the following:
         a.  Restricting variances between the state and local tax
      bases.
         b.  Requiring states to administer any sales and use taxes
      levied by local jurisdictions within the state so that sellers
      collecting and remitting these taxes must not have to register or
      file returns with, remit funds to, or be subject to independent
      audits from local taxing jurisdictions.
         c.  Restricting the frequency of changes in the local sales
      and use tax rates and setting effective dates for the application of
      local jurisdictional boundary changes to local sales and use taxes.
         d.  Providing notice of changes in local sales and use tax
      rates and of changes in the boundaries of local taxing jurisdictions.

         7.  Monetary allowances.  The agreement must outline any
      monetary allowances that are to be provided by the states to sellers
      or certified service providers.
         8.  State compliance.  The agreement must require each state
      to certify compliance with the terms of the agreement prior to
      joining and to maintain compliance, under the laws of the member
      state, with all provisions of the agreement while a member.
         9.  Consumer privacy.  The agreement must require each state
      to adopt a uniform policy for certified service providers that
      protects the privacy of consumers and maintains the confidentiality
      of tax information.
         10.  Advisory councils.  The agreement must provide for the
      appointment of an advisory council of private sector representatives
      and an advisory council of nonmember state representatives to consult
      with in the administration of the agreement.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §104, 205
         Referred to in § 423.1

Footnotes

         Former § 423.11 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, § 151, 205
        423.12  LIMITED BINDING AND BENEFICIAL EFFECT.
         1.  The agreement binds and inures only to the benefit of Iowa and
      the other member states.  A person, other than a member state, is not
      an intended beneficiary of the agreement.  Any benefit to a person
      other than a member state is established by the law of Iowa and not
      by the terms of the agreement.
         2.  A person shall not have any cause of action or defense under
      the agreement or by virtue of this state's entry into the agreement.
      A person may not challenge, in any action brought under any provision
      of law, any action or inaction by any department, agency, or other
      instrumentality of this state, or any political subdivision of this
      state on the ground that the action or inaction is inconsistent with
      the agreement.
         3.  A law of this state, or the application of it, shall not be
      declared invalid as to any such person or circumstance on the ground
      that the provision or application is inconsistent with the agreement.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §105, 205

Footnotes

         Former § 423.12 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, § 151, 205
        423.13  PURPOSE OF THIS SUBCHAPTER.
         The purpose of this subchapter is to provide for the
      administration and collection of sales or use tax on the part of
      retailers who are not registered under the agreement and for the
      collection of use tax on the part of consumers who are obligated to
      pay that tax directly.  Any application of the sections of this
      subchapter to retailers registered under the agreement is only by way
      of incorporation by reference into subchapter VI of this chapter.

Section History: Recent Form


         2003 Acts, 1st Ex, ch 2, §106, 205

Footnotes

         Former § 423.13 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, § 151, 205
        423.14  SALES AND USE TAX COLLECTION.
         1. a.  Sales tax, other than that described in paragraph
      "c", shall be collected by sellers who are retailers or by their
      agents.  Sellers or their agents shall, as far as practicable, add
      the sales tax, or the average equivalent thereof, to the sales price
      or charge, less trade-ins allowed and taken and when added such tax
      shall constitute a part of the sales price or charge, shall be a debt
      from consumer or user to seller or agent until paid, and shall be
      recoverable at law in the same manner as other debts.
         b.  In computing the tax to be collected as the result of any
      transaction, the tax computation must be carried to the third decimal
      place.  Whenever the third decimal place is greater than four, the
      tax must be rounded up to the next whole cent; whenever the third
      decimal place is four or less, the tax must be rounded downward to a
      whole cent.  Sellers may elect to compute the tax due on transactions
      on an item or invoice basis.  Sellers are not required to use a
      bracket system.
         c.  The tax imposed upon those sales of motor fuel which are
      subject to tax and refund under chapter 452A shall be collected by
      the state treasurer by way of deduction from refunds otherwise
      allowable under that chapter.  The treasurer shall transfer the
      amount of such deductions from the motor vehicle fuel tax fund to the
      special tax fund.
         2.  Use tax shall be collected in the following manner:
         a.  The tax upon the use of all vehicles subject only to the
      issuance of a certificate of title or the tax upon the use of
      manufactured housing shall be collected by the county treasurer or
      the state department of transportation pursuant to section 423.26,
      subsection 1.  The county treasurer shall retain one dollar from each
      tax payment collected, to be credited to the county general fund.
         b.  The tax upon the use of all tangible personal property
      other than that enumerated in paragraph "a", which is sold by a
      seller who is a retailer maintaining a place of business in this
      state, or by such other retailer or agent as the director shall
      authorize pursuant to section 423.30, shall be collected by the
      retailer or agent and remitted to the department, pursuant to the
      provisions of paragraph "e", and sections 423.24, 423.29, 423.30,
      423.32, and 423.33.
         c.  The tax upon the use of all tangible personal property not
      paid pursuant to paragraphs "a" and "b" shall be paid to the
      department directly by any person using the property within this
      state, pursuant to the provisions of section 423.34.
         d.  The tax imposed on the use of services enumerated in
      section 423.5 shall be collected, remitted, and paid to the
      department of revenue in the same manner as use tax on tangible
      personal property is collected, remitted, and paid under this
      subchapter.
         e.  All persons obligated by paragraph "a", "b", or
      "d", to collect use tax shall, as far as practicable, add that
      tax, or the average equivalent thereof, to the purchase price, less
      trade-ins allowed and taken, and when added the tax shall constitute
      a part of the purchase price.  Use tax which this section requires to
      be collected by a retailer and any tax collected pursuant to this
      section by a retailer shall constitute a debt owed by the retailer to
      this state.  Tax which must be paid directly to the department,
      pursuant to paragraph "c" or "d", is to be computed and added
      by the consumer or user to the purchase price in the same manner as
      this paragraph requires a seller to compute and add the tax.  The tax
      shall be a debt from the consumer or user to the department until
      paid, and shall be recoverable at law in the same manner as other
      debts.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §107, 205; 2006 Acts, ch 1142, §83; 2008
      Acts, ch 1113, §43
         Referred to in § 99G.30A, 321.105A, 331.557, 423.35, 423.57,
      423A.6, 423B.6, 423C.4, 423D.4, 455B.455

Footnotes

         Former § 423.14 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, § 151, 205
        423.15  GENERAL SOURCING RULES.
         All sellers obligated to collect Iowa sales or use tax shall use
      the standards set out in this section to determine where sales of
      products occur, excluding sales enumerated in section 423.16.  These
      provisions apply regardless of the characterization of a product as
      tangible personal property, a digital good, or a service, excluding
      telecommunications services.  This section only applies to determine
      a seller's obligation to pay or collect and remit a sales or use tax
      with respect to the seller's sale of a product.  This section does
      not affect the obligation of a purchaser or lessee to remit tax on
      the use of the product to the taxing jurisdictions in which the use
      occurs.  A seller's obligation to collect Iowa sales tax or Iowa use
      tax only occurs if the sale is sourced to this state.  The
      application of whether Iowa sales tax applies to sales sourced to
      Iowa depends upon where the sale is consummated by delivery.
         1.  Sales, excluding leases or rentals, of products shall be
      sourced as follows:
         a.  When the product is received by the purchaser at a
      business location of the seller, the sale is sourced to that business
      location.
         b.  When the product is not received by the purchaser at a
      business location of the seller, the sale is sourced to the location
      where receipt by the purchaser or the purchaser's donee, designated
      as such by the purchaser, occurs, including the location indicated by
      instructions for delivery to the purchaser or donee, known to the
      seller.
         c.  When paragraphs "a" and "b" do not apply, the sale
      is sourced to the location indicated by an address for the purchaser
      that is available from the business records of the seller that are
      maintained in the ordinary course of the seller's business when use
      of this address does not constitute bad faith.
         d.  When paragraphs "a", "b", and "c" do not
      apply, the sale is sourced to the location indicated by an address
      for the purchaser obtained during the consummation of the sale,
      including the address of a purchaser's payment instrument, if no
      other address is available, when use of this address does not
      constitute bad faith.
         e.  When paragraphs "a", "b", "c", and "d" do
      not apply, including the circumstance where the seller is without
      sufficient information to apply the previous rules, then the location
      will be determined by the address from which tangible personal
      property was shipped, from which the digital good or the computer
      software delivered electronically was first available for
      transmission by the seller, or from which the service was provided
      disregarding for these purposes any location that merely provided the
      digital transfer of the product sold.
         2.  The lease or rental of tangible personal property, other than
      property identified in subsection 3 or section 423.16, shall be
      sourced as follows:
         a.  For a lease or rental that requires recurring periodic
      payments, the first periodic payment is sourced the same as a retail
      sale in accordance with the provisions of subsection 1.  Periodic
      payments made subsequent to the first payment are sourced to the
      primary property location for each period covered by the payment.
      The primary property location shall be as indicated by an address for
      the property provided by the lessee that is available to the lessor
      from its records maintained in the ordinary course of business, when
      use of this address does not constitute bad faith.  The property
      location shall not be altered by intermittent use at different
      locations, such as use of business property that accompanies
      employees on business trips and service calls.
         b.  For a lease or rental that does not require recurring
      periodic payments, the payment is sourced the same as a retail sale
      in accordance with the provisions of subsection 1.
         c.  This subsection does not affect the imposition or
      computation of sales or use tax on leases or rentals based on a lump
      sum or accelerated basis, or on the acquisition of property for
      lease.
         3.  The retail sale, including lease or rental, of transportation
      equipment shall be sourced the same as a retail sale in accordance
      with the provisions of subsection 1, notwithstanding the exclusion of
      lease or rental in that subsection.  "Transportation equipment"
      means any of the following:
         a.  Locomotives or railcars that are utilized for the carriage
      of persons or property in interstate commerce.
         b.  Trucks and truck-tractors with a gross vehicle weight
      rating of ten thousand one pounds or greater, trailers, semitrailers,
      or passenger buses that meet both of the following requirements:
         (1)  Are registered through the international registration plan.
         (2)  Are operated under authority of a carrier authorized and
      certificated by the United States department of transportation or
      another federal authority to engage in the carriage of persons or
      property in interstate commerce.
         c.  Aircraft that are operated by air carriers authorized and
      certificated by the United States department of transportation or
      another federal or a foreign authority to engage in the carriage of
      persons or property in interstate or foreign commerce.
         d.  Containers designed for use on and component parts
      attached or secured on the items set forth in paragraphs "a"
      through "c".

Section History: Recent Form

Footnotes

         Former § 423.15 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, § 151, 205
        423.16  TRANSACTIONS TO WHICH THE GENERAL SOURCING
      RULES DO NOT APPLY.
         Section 423.15 does not apply to sales or use taxes levied on the
      following:
         1.  The retail sale or transfer of watercraft, modular homes,
      manufactured housing, or mobile homes, and the retail sale, excluding
      lease or rental, of motor vehicles, trailers, semitrailers, or
      aircraft that do not qualify as transportation equipment, as defined
      in section 423.15, subsection 3.
         2.  The lease or rental of motor vehicles, trailers, semitrailers,
      or aircraft that do not qualify as transportation equipment, as
      defined in section 423.15, subsection 3, which shall be sourced in
      accordance with section 423.17.
         3.  Transactions to which direct mail sourcing is applicable,
      which shall be sourced in accordance with section 423.19.
         4.  Telecommunications services, as set out in section 423.20,
      which shall be sourced in accordance with section 423.20, subsection
      2.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §109, 205; 2007 Acts, ch 179, §2
         Referred to in § 423.15, 423.57

Footnotes

         Former § 423.16 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, § 151, 205
        423.17  SOURCING RULES FOR VARIOUS TYPES OF LEASED OR
      RENTED EQUIPMENT WHICH IS NOT TRANSPORTATION EQUIPMENT.
         The lease or rental of motor vehicles, trailers, semitrailers, or
      aircraft that do not qualify as transportation equipment, as defined
      in section 423.15, subsection 3, shall be sourced as follows:
         1.  For a lease or rental that requires recurring periodic
      payments, each periodic payment is sourced to the primary property
      location.  The primary property location shall be as indicated by an
      address for the property provided by the lessee that is available to
      the lessor from its records maintained in the ordinary course of
      business, when use of this address does not constitute bad faith.
      This location shall not be altered by intermittent use at different
      locations.
         2.  For a lease or rental that does not require recurring periodic
      payments, the payment is sourced the same as a retail sale in
      accordance with the provisions of section 423.15, subsection 1.
         3.  This section does not affect the imposition or computation of
      sales or use tax on leases or rentals based on a lump sum or
      accelerated basis, or on the acquisition of property for lease.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §110, 205
         Referred to in § 423.16, 423.57

Footnotes

         Former § 423.17 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, § 151, 205
        423.18  MULTIPLE POINTS OF USE EXEMPTION FORMS.
      Repealed by 2007 Acts, ch 179, § 9.
        423.19  DIRECT MAIL SOURCING.
         1.  Notwithstanding section 423.15, a purchaser of direct mail
      that is not a holder of a direct pay tax permit pursuant to section
      423.36 shall provide to the seller in conjunction with the purchase
      either a direct mail form or information to show the jurisdictions to
      which the direct mail is delivered to recipients.
         a.  Upon receipt of the direct mail form, the seller is
      relieved of all obligations to collect, pay, or remit the applicable
      tax and the purchaser is obligated to pay or remit the applicable tax
      on a direct pay basis.  A direct mail form shall remain in effect for
      all future sales of direct mail by the seller to the purchaser until
      it is revoked in writing.
         b.  Upon receipt of information from the purchaser showing the
      jurisdictions to which the direct mail is delivered to recipients,
      the seller shall collect the tax according to the delivery
      information provided by the purchaser.  In the absence of bad faith,
      the seller is relieved of any further obligation to collect tax on
      any transaction where the seller has collected tax pursuant to the
      delivery information provided by the purchaser.
         2.  If the purchaser of direct mail does not have a direct pay tax
      permit and does not provide the seller with either a direct mail form
      or delivery information, as required by subsection 1, the seller
      shall collect the tax according to section 423.15, subsection 1,
      paragraph "e".  Nothing in this subsection shall limit a
      purchaser's obligation for sales or use tax to any state to which the
      direct mail is delivered.
         3.  If a purchaser of direct mail provides the seller with
      documentation of direct pay authority, the purchaser shall not be
      required to provide a direct mail form or delivery information to the
      seller.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §112, 205
         Referred to in § 423.16, 423.57
        423.20  TELECOMMUNICATIONS SERVICE SOURCING.
         1.  As used in this section:
         a.  "Air-to-ground radiotelephone service" means a radio
      service, as that term is used in 47 C.F.R. § 22.99, in which common
      carriers are authorized to offer and provide radio telecommunications
      service for hire to subscribers in aircraft.
         b.  "Call-by-call basis" means any method of charging for the
      telecommunications service where the price is measured by individual
      calls.
         c.  "Communications channel" means a physical or virtual path
      of communications over which signals are transmitted between or among
      customer channel termination points.
         d.  "Customer" means the person or entity that contracts with
      the seller of the telecommunications service.  If the end user of the
      telecommunications service is not the contracting party, the end user
      of the telecommunications service is the customer of the
      telecommunications service, but this sentence only applies for the
      purpose of sourcing sales of the telecommunications service under
      this section.  "Customer" does not include a reseller of a
      telecommunications service or for mobile telecommunications service
      of a serving carrier under an agreement to serve the customer outside
      the home service provider's licensed service area.
         e.  "Customer channel termination point" means the location
      where the customer either inputs or receives the communications.
         f.  "End user" means the person who utilizes the
      telecommunications service.  In the case of an entity, "end user"
      means the individual who utilizes the service on behalf of the
      entity.
         g.  "Home service provider" means the same as that term is
      defined in the federal Mobile Telecommunications Sourcing Act, Pub.
      L. No. 106-252, 4 U.S.C. § 124(5).
         h.  "Mobile telecommunications service" means the same as that
      term is defined in the federal Mobile Telecommunications Sourcing
      Act, Pub. L. No. 106-252, 4 U.S.C. § 124(7).
         i.  "Place of primary use" means the street address
      representative of where the customer's use of the telecommunications
      service primarily occurs, which must be the residential street
      address or the primary business street address of the customer.  In
      the case of mobile telecommunications service, "place of primary
      use" must be within the licensed service area of the home service
      provider.
         j.  "Postpaid calling service" means the telecommunications
      service obtained by making a payment on a call-by-call basis either
      through the use of a credit card or payment mechanism such as a bank
      card, travel card, credit card, or debit card, or by charge made to a
      telephone number which is not associated with the origination or
      termination of the telecommunications service.  A "postpaid calling
      service" includes a telecommunications service, except a prepaid
      wireless calling service, that would be a prepaid calling service
      except it is not exclusively a telecommunications service.
         k.  "Prepaid calling service" means the right to access
      exclusively telecommunications services, which must be paid for in
      advance and which enables the origination of calls using an access
      number or authorization code, whether manually or electronically
      dialed, and that is sold in predetermined units or dollars of which
      the amount declines with use in a known amount.
         l.  "Prepaid wireless calling service" means a
      telecommunications service that provides the right to utilize mobile
      wireless service as well as other nontelecommunications services,
      including the download of digital products delivered electronically,
      content and ancillary services, which must be paid for in advance and
      that is sold in predetermined units or dollars of which the amount
      declines with use in a known amount.
         m.  "Private communication service" means a telecommunications
      service that entitles the customer to exclusive or priority use of a
      communications channel or group of channels between or among
      termination points, regardless of the manner in which such channel or
      channels are connected, and includes switching capacity, extension
      lines, stations, and any other associated services that are provided
      in connection with the use of such channel or channels.
         n.  "Service address" means one of the following:
         (1)  The location of the telecommunications equipment to which a
      customer's call is charged and from which the call originates or
      terminates, regardless of where the call is billed or paid.
         (2)  If the location in subparagraph (1) is not known, "service
      address" means the origination point of the signal of the
      telecommunications service first identified by either the seller's
      telecommunications system or in information received by the seller
      from its service provider, where the system used to transport such
      signals is not that of the seller.
         (3)  If the locations in subparagraphs (1) and (2) are not known,
      the "service address" means the location of the customer's place
      of primary use.
         2.  Sales of telecommunications services shall be sourced in the
      following manner:
         a.  Except for the defined telecommunications services in
      paragraph "c", the sale of telecommunications services sold on a
      call-by-call basis shall be sourced to one of the following:
         (1)  Each level of taxing jurisdiction where the call originates
      and terminates in that jurisdiction.
         (2)  Each level of taxing jurisdiction where the call either
      originates or terminates and in which the service address is also
      located.
         b.  Except for the defined telecommunications services in
      paragraph "c", a sale of telecommunications services sold on a
      basis other than a call-by-call basis is sourced to the customer's
      place of primary use.
         c.  Sale of the following telecommunications services shall be
      sourced to each level of taxing jurisdiction as follows:
         (1)  A sale of mobile telecommunications services other than
      air-to-ground radiotelephone service, prepaid calling service, or
      prepaid wireless calling service is sourced to the customer's place
      of primary use as required by the federal Mobile Telecommunications
      Sourcing Act.
         (2)  A sale of postpaid calling service is sourced to the
      origination point of the telecommunications signal as first
      identified by either of the following:
         (a)  The seller's telecommunications system.
         (b)  Information received by the seller from its service provider,
      where the system used to transport such signals is not that of the
      seller.
         (3)  A sale of prepaid calling service or a sale of prepaid
      wireless calling service is sourced in accordance with section
      423.15.  However, in the case of a sale of a prepaid wireless calling
      service, the rule provided in section 423.15, subsection 1, paragraph
      "e", shall include as an option the location associated with the
      mobile telephone number.
         (4)  A sale of a private telecommunications service is sourced as
      follows:
         (a)  Service for a separate charge related to a customer channel
      termination point is sourced to each level of jurisdiction in which
      such customer channel termination point is located.
         (b)  Service where all customer termination points are located
      entirely within one jurisdiction or level of jurisdiction is sourced
      in such jurisdiction in which the customer channel termination points
      are located.
         (c)  Service for segments of a channel between two customer
      channel termination points located in different jurisdictions and
      which segments of a channel are separately charged is sourced fifty
      percent in each level of jurisdiction in which the customer channel
      termination points are located.
         (d)  Service for segments of a channel located in more than one
      jurisdiction or levels of jurisdiction and which segments are not
      separately billed is sourced in each jurisdiction based on the
      percentage determined by dividing the number of customer channel
      termination points in such jurisdiction by the total number of
      customer channel termination points.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §113, 205; 2006 Acts, ch 1158, §72--74,
      80
         Referred to in § 423.16, 423.57
        423.21  BAD DEBT DEDUCTIONS.
         1.  For the purposes of this section, "bad debt" means an
      amount properly calculated pursuant to section 166 of the Internal
      Revenue Code then adjusted to exclude financing charges or interest,
      sales or use taxes charged on the purchase price, uncollectible
      amounts on property that remain in the possession of the seller until
      the full purchase price is paid, expenses incurred in attempting to
      collect any debt, and repossessed property.
         2.  In computing the amount of tax due, a seller may deduct bad
      debts from the total amount upon which the tax is calculated for any
      return.  Any deduction taken or refund paid which is attributed to
      bad debts shall not include interest.
         3.  A seller may deduct bad debts on the return for the period
      during which the bad debt is written off as uncollectible in the
      seller's books and records and is eligible to be deducted for federal
      income tax purposes.  For purposes of this subsection, a seller who
      is not required to file federal income tax returns may deduct a bad
      debt on a return filed for the period in which the bad debt is
      written off as uncollectible in the seller's books and records and
      would be eligible for a bad debt deduction for federal income tax
      purposes if the seller were required to file a federal income tax
      return.
         4.  If a deduction is taken for a bad debt and the seller
      subsequently collects the debt in whole or in part, the tax on the
      amount so collected must be paid and reported on the return filed for
      the period in which the collection is made.
         5.  A seller may obtain a refund of tax on any amount of bad debt
      that exceeds the amount of taxable sales within the period allowed
      for refund claims by section 423.47.  However, the period allowed for
      refund claims shall be measured from the due date of the return on
      which the bad debt could first be claimed.
         6.  For the purposes of computing a bad debt deduction or
      reporting a payment received on a previously claimed bad debt, any
      payments made on a debt or account shall be applied first to the
      price of the property or service and tax thereon, proportionally, and
      secondly to interest, service charges, and any other charges.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §114, 205
         Referred to in § 423.53, 423.57

Footnotes

         Former § 423.21 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, § 151, 205
        423.22  TAXATION IN ANOTHER STATE.
         If any person who causes tangible personal property to be brought
      into this state or who uses in this state services enumerated in
      section 423.2 has already paid a tax in another state in respect to
      the sale or use of the property or the performance of the service, or
      an occupation tax in respect to the property or service, in an amount
      less than the tax imposed by subchapter II or III, the provisions of
      those subchapters shall apply, but at a rate measured by the
      difference only between the rate fixed by subchapter II or III and
      the rate by which the previous tax on the sale or use, or the
      occupation tax, was computed.  If the tax imposed and paid in the
      other state is equal to or more than the tax imposed by those
      subchapters, then a tax is not due in this state on the personal
      property or service.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §115, 205
         Referred to in § 423.57

Footnotes

         Former § 423.22 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, § 151, 205
        423.23  SELLERS' AGREEMENTS.
         Agreements between competing sellers, or the adoption of
      appropriate rules and regulations by organizations or associations of
      sellers to provide uniform methods for adding sales or use tax or the
      average equivalent thereof, and which do not involve price-fixing
      agreements otherwise unlawful, are expressly authorized and shall be
      held not in violation of chapter 553 or other antitrust laws of this
      state.  The director shall cooperate with sellers, organizations, or
      associations in formulating agreements and rules.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §116, 205
         Referred to in § 99G.30A, 321.105A, 423.57, 423A.6, 423B.6,
      423C.4, 423D.4, 455B.455

Footnotes

         Former § 423.23 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, § 151, 205
        423.24  ABSORBING TAX PROHIBITED.
         A seller shall not advertise or hold out or state to the public or
      to any purchaser, consumer, or user, directly or indirectly, that the
      taxes or any parts thereof imposed by subchapter II or III will be
      assumed or absorbed by the seller or the taxes will not be added to
      the sales price of the property sold, or if added that the taxes or
      any part thereof will be refunded.  Any person violating any of the
      provisions of this section within this state is guilty of a simple
      misdemeanor.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §117, 205
         Referred to in § 99G.30A, 321.105A, 423.14, 423.40, 423.57,
      423A.6, 423B.6, 423C.4, 423D.4, 455B.455

Footnotes

         Former § 423.24 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, § 151, 205
        423.24A  REIMBURSEMENT FOR THE PRIMARY ROAD FUND.
      Repealed by 2003 Acts, 1st Ex, ch 2, § 151, 205.  See § 321.145.
        423.25  DIRECTOR'S POWER TO ADOPT RULES.
         The director shall have the power to adopt rules for adding the
      taxes imposed by subchapters II and III, or the average equivalents
      thereof, by providing different methods applying uniformly to
      retailers within the same general classification for the purpose of
      enabling the retailers to add and collect, as far as practicable, the
      amounts of those taxes.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §118, 205
         Referred to in § 99G.30A, 321.105A, 423.57, 423A.6, 423B.6,
      423C.4, 423D.4, 455B.455

Footnotes

         Former § 423.25 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, § 151, 205
        423.26  VEHICLES SUBJECT ONLY TO THE ISSUANCE OF TITLE
      -- MANUFACTURED HOUSING -- VEHICLE LEASE TRANSACTIONS NOT REQUIRING
      TITLE OR REGISTRATION.
         1. a.  The use tax imposed upon the use of vehicles subject
      only to the issuance of a certificate of title or imposed upon the
      use of manufactured housing shall be paid by the owner of the vehicle
      or of the manufactured housing to the county treasurer or the state
      department of transportation from whom the certificate of title is
      obtained.  A certificate of title shall not be issued until the tax
      has been paid.  The county treasurer or the state department of
      transportation shall require every applicant for a certificate of
      title to supply information as the county treasurer or the director
      deems necessary as to the time of purchase, the purchase price,
      installed purchase price, and other information relative to the
      purchase of the vehicle or manufactured housing.  On or before the
      tenth day of each month, the county treasurer or the state department
      of transportation shall remit to the department the amount of the
      taxes collected during the preceding month.
         b.  A person who willfully makes a false statement in regard
      to the purchase price of a vehicle subject to taxation under this
      subsection is guilty of a fraudulent practice.  A person who
      willfully makes a false statement in regard to the purchase price of
      such a vehicle with the intent to evade the payment of tax shall be
      assessed a penalty of seventy-five percent of the amount of tax
      unpaid and required to be paid on the actual purchase price less
      trade-in allowance.
         2. a.  The use tax imposed upon the use of leased vehicles if
      the lease transaction does not require titling or registration of the
      vehicle shall be remitted to the department.  Tax and the reporting
      of tax due to the department shall be remitted on or before fifteen
      days from the last day of the month that the tax becomes due.
      Failure to timely report or remit any of the tax when due shall
      result in a penalty and interest being imposed on the tax due
      pursuant to section 423.40, subsection 1, and section 423.42,
      subsection 1.
         b.  The amount subject to tax shall be computed on each
      separate lease transaction by taking the total of the lease payments,
      plus the down payment, and excluding all of the following:
         (1)  Title fee.
         (2)  Registration fees.
         (3)  Use tax pursuant to this subsection.
         (4)  Federal excise taxes attributable to the sale of the vehicle
      to the owner or to the lease of the vehicle by the owner.
         (5)  Optional service or warranty contracts subject to tax
      pursuant to section 423.2, subsection 1.
         (6)  Insurance.
         (7)  Manufacturer's rebate.
         (8)  Refundable deposit.
         (9)  Finance charges, if any, on items listed in subparagraphs (1)
      through (8).
         c.  If any or all of the items in paragraph "b",
      subparagraphs (1) through (8) are excluded from the taxable lease
      price, the owner shall maintain adequate records of the amounts of
      those items.  If the parties to a lease enter into an agreement
      providing that the tax imposed under this subsection is to be paid by
      the lessee or included in the monthly lease payments to be paid by
      the lessee, the total cost of the tax shall not be included in the
      computation of lease price for the purpose of taxation under this
      subsection.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §119, 205; 2008 Acts, ch 1113, §44
         Referred to in § 312.1, 321.20, 331.557, 423.3, 423.5, 423.14,
      423.36, 423.43
         Fraudulent practices, see §714.8--714.14

Footnotes

         Former § 423.26 repealed effective July 1, 2004, by 2003 Acts, 1st
      Ex, ch 2, § 151, 205
        423.27  MOTOR VEHICLE LEASE TAX.  Repealed by 2008
      Acts, ch 1113, § 46.  See § 423.26.
        423.28  SALES TAX REPORT -- DEDUCTION.
         Motor vehicle or trailer dealers, in making their reports and
      returns to the department for the purpose of paying the sales tax,
      shall be permitted to deduct all sales prices from retail sales of
      vehicles subject to registration or subject only to the issuance of a
      certificate of title.  Sales prices from sales of vehicles subject to
      registration or subject only to the issuance of a certificate of
      title are exempted from the sales tax, but, if required by the
      director, the sales prices shall be included in the returns made by
      motor vehicle or trailer dealers under subchapter II, and proper
      deductions taken pursuant to this section.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §121, 205
         Referred to in § 423.57
        423.29  COLLECTIONS BY SELLERS.
         Every seller who is a retailer and who is making taxable sales of
      tangible personal property in Iowa shall, at the time of selling the
      property, collect the sales tax.  Every seller who is a retailer
      maintaining a place of business in this state and selling tangible
      personal property for use in Iowa shall, at the time of making the
      sale, whether within or without the state, collect the use tax.
      Sellers required to collect sales or use tax shall give to any
      purchaser a receipt for the tax collected in the manner and form
      prescribed by the director.
         Every seller who is a retailer furnishing taxable services in Iowa
      and every seller who is a retailer maintaining a place of business in
      this state and furnishing taxable services in Iowa or services
      outside Iowa if the product or result of the service is used in Iowa
      shall be subject to the provisions of the preceding paragraph.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §122, 205
         Referred to in § 423.14, 423.57
        423.30  FOREIGN SELLERS NOT REGISTERED UNDER THE
      AGREEMENT.
         The director may, upon application, authorize the collection of
      the use tax by any seller who is a retailer not maintaining a place
      of business within this state and not registered under the agreement,
      who, to the satisfaction of the director, furnishes adequate security
      to ensure collection and payment of the tax.  Such sellers shall be
      issued, without charge, permits to collect tax subject to any
      regulations which the director shall prescribe.  When so authorized,
      it shall be the duty of foreign sellers to collect the tax upon all
      tangible personal property sold, to the retailer's knowledge, for use
      within this state, in the same manner and subject to the same
      requirements as a retailer maintaining a place of business within
      this state.  The authority and permit may be canceled when, at any
      time, the director considers the security inadequate, or that tax can
      more effectively be collected from the person using property in this
      state.
         The discretionary power granted in this section is extended to
      apply in the case of foreign retailers furnishing services enumerated
      in section 423.2.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §123, 205
         Referred to in § 423.14, 423.32
        423.31  FILING OF SALES TAX RETURNS AND PAYMENT OF
      SALES TAX.
         1.  Each person subject to this section and section 423.36 and in
      accordance with the provisions of this section and section 423.36
      shall, on or before the last day of the month following the close of
      each calendar quarter during which such person is or has become or
      ceased being subject to the provisions of this section and section
      423.36, make, sign, and file a return for the calendar quarter in the
      form as may be required.  Returns shall show information relating to
      sales prices including goods, wares, and services converted to the
      use of such person, the amounts of sales prices excluded and exempt
      from the tax, the amounts of sales prices subject to tax, a
      calculation of tax due, and any other information for the period
      covered by the return as may be required.  Returns shall be signed by
      the retailer or the retailer's authorized agent and must be certified
      by the retailer to be correct in accordance with forms and rules
      prescribed by the director.
         2.  Persons required to file, or committed to file by reason of
      voluntary action or by order of the department, deposits of taxes due
      under this subchapter shall be entitled to take credit against the
      total quarterly amount of tax due such amount as shall have been
      deposited by such persons during that calendar quarter.  The balance
      remaining due after such credit for deposits shall be entered on the
      return.  However, such person may be granted an extension of time not
      exceeding thirty days for filing the quarterly return, upon a proper
      showing of necessity.  If an extension is granted, such person shall
      have paid by the twentieth day of the month following the close of
      such quarter ninety percent of the estimated tax due.
         3.  The sales tax forms prescribed by the director shall be
      referred to as "retailers tax deposit".  Deposit forms shall be
      signed by the retailer or the retailer's duly authorized agent, and
      shall be duly certified by the retailer or agent to be correct.  The
      director may authorize incorporated banks and trust companies or
      other depositories authorized by law which are depositories or
      financial agents of the United States, or of this state, to receive
      any sales tax imposed under this chapter, in the manner, at the
      times, and under the conditions the director prescribes.  The
      director shall prescribe the manner, times, and conditions under
      which the receipt of the tax by those depositories is to be treated
      as payment of the tax to the department.
         4.  Every retailer at the time of making any return required by
      this section shall compute and pay to the department the tax due for
      the preceding period.  The tax on sales prices from the sale or
      rental of tangible personal property under a consumer rental purchase
      agreement as defined in section 537.3604, subsection 8, is payable in
      the tax period of receipt.
         5. a.  Upon making application and receiving approval from the
      director, a parent corporation and its affiliated corporations that
      make retail sales of tangible personal property or taxable enumerated
      services may make deposits and file a consolidated sales tax return
      for the affiliated group, pursuant to rules adopted by the director.
      A parent corporation and each affiliate corporation that files a
      consolidated return are jointly and severally liable for all tax,
      penalty, and interest found due for the tax period for which a
      consolidated return is filed or required to be filed.
         b.  A business required to file a consolidated sales tax
      return shall file a form entitled "schedule of consolidated business
      locations" with its quarterly sales tax return that shows the
      taxpayer's consolidated permit number, the permit number for each
      Iowa business location, the state sales tax amount by business
      location, and the amount of state sales tax due on goods consumed
      that are not assigned to a specific business location.  Consolidated
      quarterly sales tax returns that are not accompanied by the schedule
      of consolidated business locations form are considered incomplete and
      are subject to penalty under section 421.27.
         6.  If necessary or advisable in order to insure the payment of
      the tax, the director may require returns and payment of the tax to
      be made for other than quarterly periods, the provisions of this
      section or other provision to the contrary notwithstanding.
         7.  Notwithstanding any other provision of the Code to the
      contrary, the department shall not attempt to collect delinquent
      sales tax on a transaction involving the furnishing of lawn care,
      landscaping, or tree trimming and removal services which occurred
      more than five years from the date of an audit.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §124, 205; 2008 Acts, ch 1172, §23
         Referred to in § 99G.30A, 421.26, 423.33, 423.36, 423.45, 423.57,
      423A.6, 423B.6, 423C.4, 423D.4, 455B.455
        423.32  FILING OF USE TAX RETURNS AND PAYMENT OF USE
      TAX.
         1.  A retailer maintaining a place of business in this state who
      is required to collect or a user who is required to pay the use tax
      or a foreign retailer authorized, pursuant to section 423.30, to
      collect the use tax, shall remit to the department the amount of tax
      on or before the last day of the month following each calendar
      quarterly period.  However, a retailer who collects or owes more than
      fifteen hundred dollars in use taxes in a month shall deposit with
      the department or in a depository authorized by law and designated by
      the director, the amount collected or owed, with a deposit form for
      the month as prescribed by the director.
         a.  The deposit form is due on or before the twentieth day of
      the month following the month of collection, except a deposit is not
      required for the third month of the calendar quarter, and the total
      quarterly amount, less the amounts deposited for the first two months
      of the quarter, is due with the quarterly report on the last day of
      the month following the month of collection.  At that time, the
      retailer shall file with the department a return for the preceding
      quarterly period in the form prescribed by the director showing the
      purchase price of the tangible personal property sold by the retailer
      during the preceding quarterly period, the use of which is subject to
      the use tax imposed by this chapter, and other information the
      director deems necessary for the proper administration of the use
      tax.
         b.  The return shall be accompanied by a remittance of the use
      tax for the period covered by the return.  If necessary in order to
      ensure payment to the state of the tax, the director may in any or
      all cases require returns and payments to be made for other than
      quarterly periods.  The director, upon request and a proper showing
      of necessity, may grant an extension of time not to exceed thirty
      days for making any return and payment.  Returns shall be signed, in
      accordance with forms and rules prescribed by the director, by the
      retailer or the retailer's authorized agent, and shall be certified
      by the retailer or agent to be correct.
         2.  If it is reasonably expected, as determined by rules
      prescribed by the director, that a retailer's annual sales or use tax
      liability will not exceed one hundred twenty dollars for a calendar
      year, the retailer may request and the director may grant permission
      to the retailer, in lieu of the quarterly filing and remitting
      requirements set out elsewhere in this section, to file the return
      required by and remit the sales or use tax due under this section on
      a calendar-year basis.  The return and tax are due and payable no
      later than January 31 following each calendar year in which the
      retailer carries on business.
         3.  The director, in cooperation with the department of
      management, may periodically change the filing and remittance
      thresholds by administrative rule if in the best interests of the
      state and taxpayer to do so.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §125, 205
         Referred to in § 99G.30A, 321.105A, 421.26, 423.14, 423.33,
      423.34, 423.45, 423.57, 423B.6, 423D.4
        423.33  LIABILITY OF PERSONS OTHER THAN RETAILERS FOR
      PAYMENT OF SALES OR USE TAX.
         1.  Liability of purchaser for sales tax.  If a purchaser
      fails to pay sales tax to the retailer required to collect the tax,
      then in addition to all of the rights, obligations, and remedies
      provided, the tax is payable by the purchaser directly to the
      department, and sections 423.31, 423.32, 423.37, 423.38, 423.39,
      423.40, 423.41, and 423.42 apply to the purchaser.  For failure to
      pay, the retailer and purchaser are liable, unless the circumstances
      described in section 421.60, subsection 2, paragraph "m", section
      423.34A, or section 423.45, subsection 4, paragraph "b" or
      "e", or subsection 5, paragraph "c" or "e", are
      applicable.
         2.  Immediate successor liability for sales or use tax.  If a
      retailer sells the retailer's business or stock of goods or quits the
      business, the retailer shall prepare a final return and pay all sales
      or use tax due within the time required by law.  The immediate
      successor to the retailer, if any, shall withhold a sufficient
      portion of the purchase price, in money or money's worth, to pay the
      amount of delinquent tax, interest, or penalty due and unpaid.  If
      the immediate successor of the business or stock of goods
      intentionally fails to withhold the amount due from the purchase
      price as provided in this subsection, the immediate successor is
      personally liable for the payment of delinquent taxes, interest, and
      penalty accrued and unpaid on account of the operation of the
      business by the immediate former retailer, except when the purchase
      is made in good faith as provided in section 421.28.  However, a
      person foreclosing on a valid security interest or retaking
      possession of premises under a valid lease is not an "immediate
      successor" for purposes of this section.  The department may waive
      the liability of the immediate successor under this subsection if the
      immediate successor exercised good faith in establishing the amount
      of the previous liability.
         3.  Event sponsor's liability for sales tax.  A person
      sponsoring a flea market or a craft, antique, coin, or stamp show or
      similar event shall obtain from every retailer selling tangible
      personal property or taxable services at the event proof that the
      retailer possesses a valid sales tax permit or secure from the
      retailer a statement, taken in good faith, that property or services
      offered for sale are not subject to sales tax.  Failure to do so
      renders a sponsor of the event liable for payment of any sales tax,
      interest, and penalty due and owing from any retailer selling
      property or services at the event.  Sections 423.31, 423.32, 423.37,
      423.38, 423.39, 423.40, 423.41, and 423.42 apply to the sponsors.
      For purposes of this subsection, a "person sponsoring a flea market
      or a craft, antique, coin, or stamp show or similar event" does not
      include an organization which sponsors an event determined to qualify
      as an event involving casual sales pursuant to section 423.3,
      subsection 39, or the state fair or a fair as defined in section
      174.1.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §126, 205; 2005 Acts, ch 19, §55; 2006
      Acts, ch 1158, §50; 2007 Acts, ch 179, §3, 10
         Referred to in § 99G.30A, 321.105A, 421.26, 421.28, 423.14,
      423.34, 423.57, 423A.6, 423B.6, 423C.4, 423D.4, 455B.455

Footnotes

         2007 amendment to subsection 1 is effective January 1, 2009; 2007
      Acts, ch 179, §10
        423.34  LIABILITY OF USER.
         Any person who uses any property or services enumerated in section
      423.2 upon which the use tax has not been paid, either to the county
      treasurer or to a retailer or direct to the department as required by
      this subchapter, shall be liable for the payment of tax, and shall on
      or before the last day of the month next succeeding each quarterly
      period pay the use tax upon all property or services used by the
      person during the preceding quarterly period in the manner and
      accompanied by such returns as the director shall prescribe.  All of
      the provisions of sections 423.32 and 423.33 with reference to the
      returns and payments shall be applicable to the returns and payments
      required by this section.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §127, 205
         Referred to in § 99G.30A, 421.26, 423.14, 423.57, 423B.6, 423D.4
        423.34A  EXCLUSION FROM LIABILITY FOR PURCHASERS.
         A purchaser is relieved of liability for payment of state sales or
      use tax, for payment of any local option sales tax, for payment of
      interest, or for payment of any penalty for nonpayment of tax which
      nonpayment is not fraudulent, willful, or intentional, under the
      following circumstances:
         1.  The purchaser, the purchaser's seller or certified service
      provider, or the purchaser holding a direct pay permit relied on
      erroneous data contained in this state's taxability matrix completed
      pursuant to the agreement.
         2.  The purchaser, the purchaser's seller or certified service
      provider, or the purchaser holding a direct pay permit relied on
      erroneous data provided by the state with regard to tax rates,
      boundaries, or taxing jurisdiction assignments.
         3.  The purchaser used a database described in section 423.52,
      subsection 1, or section 423.55 and relied on erroneous data about
      tax rates, boundaries, or taxing jurisdiction assignments contained
      in that database.

Section History: Recent Form

         2007 Acts, ch 179, §4, 10
         Referred to in § 99G.30A, 423.33, 423.57, 423B.6, 423D.4

Footnotes

         2007 enactment of this section is effective January 1, 2009; 2007
      Acts, ch 179, §10
        423.35  POSTING OF BOND TO SECURE PAYMENT.
         The director may, when necessary and advisable in order to secure
      the collection of the sales or use tax, authorize any person subject
      to either tax, and any retailer required or authorized to collect
      those taxes pursuant to the provisions of section 423.14, to file
      with the department a bond, issued by a surety company authorized to
      transact business in this state and approved by the insurance
      commissioner as to solvency and responsibility, in an amount as the
      director may fix, to secure the payment of any tax, interest, or
      penalties due or which may become due from such person.  In lieu of a
      bond, securities approved by the director, in an amount which the
      director may prescribe, may be deposited with the department, which
      securities shall be kept in the custody of the department and may be
      sold by the director at public or private sale, without notice to the
      depositor, if it becomes necessary to do so in order to recover any
      tax, interest, or penalties due.  Upon the sale, the surplus, if any,
      above the amounts due under this chapter shall be returned to the
      person who deposited the securities.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §128, 205
         Referred to in § 99G.30A, 321.105A, 423.57, 423A.6, 423B.6,
      423C.4, 423D.4, 452A.66, 455B.455
        423.36  PERMITS REQUIRED TO COLLECT SALES OR USE TAX
      -- APPLICATIONS -- REVOCATION.
         1.  A person shall not engage in or transact business as a
      retailer making taxable sales of tangible personal property or
      furnishing services within this state or as a retailer making taxable
      sales of tangible personal property or furnishing services for use
      within this state, unless a permit has been issued to the retailer
      under this section, except as provided in subsection 6.  Every person
      desiring to engage in or transact business as a retailer shall file
      with the department an application for a permit to collect sales or
      use tax.  Every application for a sales or use tax permit shall be
      made upon a form prescribed by the director and shall set forth any
      information the director may require.  The application shall be
      signed by an owner of the business if a natural person; in the case
      of a retailer which is an association or partnership, by a member or
      partner; and in the case of a retailer which is a corporation, by an
      executive officer or some person specifically authorized by the
      corporation to sign the application, to which shall be attached the
      written evidence of the person's authority.
         2.  To collect sales or use tax, the applicant must have a permit
      for each place of business in the state of Iowa.  The department may
      deny a permit to an applicant who is substantially delinquent in
      paying a tax due, or the interest or penalty on the tax, administered
      by the department at the time of application or if the applicant had
      a previous delinquent liability with the department.  If the
      applicant is a partnership, a permit may be denied if a partner is
      substantially delinquent in paying any delinquent tax, penalty, or
      interest or if a partner had a previous delinquent liability with the
      department.  If the applicant is a corporation, a permit may be
      denied if any officer having a substantial legal or equitable
      interest in the ownership of the corporation owes any delinquent tax,
      penalty, or interest or if any officer having a substantial legal or
      equitable interest in the ownership of the corporation had a previous
      delinquent liability with the department.
         3. a.  The department shall grant and issue to each applicant
      a permit for each place of business in this state where sales or use
      tax is collected.  A permit is not assignable and is valid only for
      the person in whose name it is issued and for the transaction of
      business at the place designated or at a place of relocation within
      the state if the ownership remains the same.
         b.  If an applicant is making sales outside Iowa for use in
      this state or furnishing services outside Iowa, the product or result
      of which will be used in this state, that applicant shall be issued
      one use tax permit by the department applicable to these out-of-state
      sales or services.
         4.  Permits issued under this section are valid and effective
      until revoked by the department.
         5.  If the holder of a permit fails to comply with any of the
      provisions of this subchapter or of subchapter II or III or any order
      or rule of the department adopted under those subchapters or is
      substantially delinquent in the payment of a tax administered by the
      department or the interest or penalty on the tax, or if the person is
      a corporation and if any officer having a substantial legal or
      equitable interest in the ownership of the corporation owes any
      delinquent tax of the permit-holding corporation, or interest or
      penalty on the tax, administered by the department, the director may
      revoke the permit.  The director shall send notice by mail to a
      permit holder informing that person of the director's intent to
      revoke the permit and of the permit holder's right to a hearing on
      the matter.  If the permit holder petitions the director for a
      hearing on the proposed revocation, after giving ten days' notice of
      the time and place of the hearing in accordance with section 17A.18,
      subsection 3, the matter may be heard and a decision rendered.  The
      director may restore permits after revocation.  The director shall
      adopt rules setting forth the period of time a retailer must wait
      before a permit may be restored or a new permit may be issued.  The
      waiting period shall not exceed ninety days from the date of the
      revocation of the permit.
         6. a.  Sellers who are not regularly engaged in selling at
      retail and do not have a permanent place of business, but who are
      temporarily engaged in selling from trucks, portable roadside stands,
      concessionaires at state, county, district, or local fairs,
      carnivals, or the like, shall report and remit the sales tax on a
      temporary basis, under rules the director shall provide for the
      efficient collection of the sales tax.  This subsection applies to
      sellers who are temporarily engaged in furnishing services.
         b.  Persons engaged in selling tangible personal property or
      furnishing services shall not be required to obtain or retain a sales
      tax permit for a place of business at which taxable sales of tangible
      personal property or taxable performance of services will not occur.

         7.  The provisions of subsection 1, dealing with the lawful right
      of a retailer to transact business, as applicable, apply to persons
      having receipts from furnishing services enumerated in section 423.2,
      except that a person holding a permit pursuant to subsection 1 shall
      not be required to obtain any separate sales tax permit for the
      purpose of engaging in business involving the services.
         8. a.  Except as provided in paragraph "b", purchasers,
      users, and consumers of tangible personal property or enumerated
      services taxed pursuant to subchapter II or III of this chapter or
      chapter 423B may be authorized, pursuant to rules adopted by the
      director, to remit tax owed directly to the department instead of the
      tax being collected and paid by the seller.  To qualify for a direct
      pay tax permit, the purchaser, user, or consumer must accrue a tax
      liability of more than four thousand dollars in tax under subchapters
      II and III in a semimonthly period and make deposits and file returns
      pursuant to section 423.31.  This authority shall not be granted or
      exercised except upon application to the director and then only after
      issuance by the director of a direct pay tax permit.
         b.  The granting of a direct pay tax permit is not authorized
      for any of the following:
         (1)  Taxes imposed on the sales, furnishing, or service of gas,
      electricity, water, heat, pay television service, and communication
      service.
         (2)  Taxes imposed under section 423.26 and chapter 423C.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §129, 205; 2008 Acts, ch 1113, §113; 2008
      Acts, ch 1134, §66; 2008 Acts, ch 1184, §57
         Referred to in § 423.19, 423.31, 423.40, 423B.5, 423E.3
        423.37  FAILURE TO FILE SALES OR USE TAX RETURNS --
      INCORRECT RETURNS.
         1.  As soon as practicable after a return is filed and in any
      event within three years after the return is filed, the department
      shall examine it, assess and determine the tax due if the return is
      found to be incorrect, and give notice to the person liable for the
      tax of the assessment and determination as provided in subsection 2.
      The period for the examination and determination of the correct
      amount of tax is unlimited in the case of a false or fraudulent
      return made with the intent to evade tax or in the case of a failure
      to file a return.
         2.  If a return required by this subchapter is not filed, or if a
      return when filed is incorrect or insufficient and the maker fails to
      file a corrected or sufficient return within twenty days after the
      same is required by notice from the department, the department shall
      determine the amount of tax due from information as the department
      may be able to obtain and, if necessary, may estimate the tax on the
      basis of external indices, such as number of employees of the person
      concerned, rentals paid by the person, stock on hand, or other
      factors.  The determination may be made using any generally
      recognized valid and reliable sampling technique, whether or not the
      person being audited has complete records, as mutually agreed upon by
      the department and the taxpayer.  The department shall give notice of
      the determination to the person liable for the tax.  The
      determination shall fix the tax unless the person against whom it is
      assessed shall, within sixty days after the giving of notice of the
      determination, apply to the director for a hearing or unless the
      taxpayer contests the determination by paying the tax, interest, and
      penalty and timely filing a claim for refund.  At the hearing,
      evidence may be offered to support the determination or to prove that
      it is incorrect.  After the hearing the director shall give notice of
      the decision to the person liable for the tax.
         3.  The three-year period of limitation provided in subsection 1
      may be extended by a taxpayer by signing a waiver agreement form to
      be provided by the department.  The agreement shall stipulate the
      period of extension and the tax period to which the extension
      applies.  The agreement shall also provide that a claim for refund
      may be filed by the taxpayer at any time during the period of
      extension.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §130, 205; 2006 Acts, ch 1158, §51
         Referred to in § 99G.30A, 321.105A, 421.10, 423.33, 423.45,
      423.57, 423A.6, 423B.6, 423C.4, 423D.4, 455B.455
        423.38  JUDICIAL REVIEW.
         1.  Judicial review of actions of the director may be sought in
      accordance with the terms of the Iowa administrative procedure Act,
      chapter 17A.
         2.  For cause and upon a showing by the director that collection
      of the tax in dispute is in doubt, the court may order the petitioner
      to file with the clerk a bond for the use of the respondent, with
      sureties approved by the clerk, in the amount of tax appealed from,
      conditioned that the petitioner shall perform the orders of the
      court.
         3.  An appeal may be taken by the taxpayer or the director to the
      supreme court of this state irrespective of the amount involved.

Section History: Recent Form

         2003 Acts, ch 44, §114; 2003 Acts, 1st Ex, ch 2, §131, 205
         Referred to in § 99G.30A, 321.105A, 421B.11, 423.33, 423.45,
      423.57, 423A.6, 423B.6, 423C.4, 423D.4, 425.31, 455B.455
         Filing petition on appeal, R.C.P. 1.1803
        423.39  SERVICE OF NOTICES.
         1.  A notice authorized or required under this subchapter may be
      given by mailing the notice to the person for whom it is intended,
      addressed to that person at the address given in the last return
      filed by the person pursuant to this subchapter, or if no return has
      been filed, then to any address obtainable.  The mailing of the
      notice is presumptive evidence of the receipt of the notice by the
      person to whom addressed.  Any period of time which is determined
      according to this subchapter by the giving of notice commences to run
      from the date of mailing of the notice.
         2.  The provisions of the Code relative to the limitation of time
      for the enforcement of a civil remedy shall not apply to any
      proceeding or action taken to levy, appraise, assess, determine, or
      enforce the collection of any tax or penalty provided by this
      chapter.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, §132, 205
         Referred to in § 99G.30A, 321.105A, 423.33, 423.45, 423.57,
      423A.6, 423B.6, 423C.4, 423D.4, 425.30, 455B.455
         Lien of tax, see § 422.26
        423.40  PENALTIES -- OFFENSES -- LIMITATION.
         1.  In addition to the sales or use tax or additional sales or use
      tax, the taxpayer shall pay a penalty as provided in section 421.27.
      The taxpayer shall also pay interest on the sales or use tax or
      additional sales or use tax at the rate in effect under section 421.7
      for each month counting each fraction of a month as an entire month,
      computed from the date the semimonthly or monthly tax deposit form or
      return was required to be filed.  The penalty and interest shall be
      paid to the department and disposed of in the same manner as other
      receipts under this subchapter.  Unpaid penalties and interest may be
      enforced in the same manner as the taxes imposed by this chapter.
         2. a.  Any person who knowingly sells tangible personal
      property, tickets or admissions to places of amusement and athletic
      events, or gas, water, electricity, or communication service at
      retail, or engages in the furnishing of services enumerated in
      section 423.2, in this state without procuring a permit to collect
      tax, as provided in section 423.36, or who violates section 423.24
      and the officers of any corporation who so act are guilty of a
      serious misdemeanor.
         b.  A person who knowingly sells tangible personal property,
      tickets or admissions to places of amusement and athletic events, or
      gas, water, electricity, or communication service at retail, or
      engages in the furnishing of services enumerated in section 423.2, in
      this state after the person's sales tax permit has been revoked and
      before it has been restored as provided in section 423.36, subsection
      5, and the officers of any corporation who so act are guilty of an
      aggravated misdemeanor.
         3.  A person who willfully attempts in any manner to evade any tax
      imposed by this chapter or the payment of the tax or a person who
      makes or causes to be made a false or fraudulent semimonthly or
      monthly tax deposit form or return with intent to evade any tax
      imposed by subchapter II or III or the payment of the tax is guilty
      of a class "D" felony.
         4.  The certificate of the director to the effect that a tax has
      not been paid, that a return has not been filed, or that information
      has not been supplied pursuant to the provisions of this subchapter
      shall be prima facie evidence thereof.
         5.  A person required to pay sales or use tax, or to make, sign,
      or file a tax deposit form or return or supplemental return, who
      willfully makes a false or fraudulent tax deposit form or return, or
      willfully fails to pay at least ninety percent of the tax or
      willfully fails to make, sign, or file the tax deposit form or
      return, at the time required by law, is guilty of a fraudulent
      practice.
         6.  A prosecution for an offense specified in this section shall
      be commenced within six years after its commission.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, § 133, 205
         Referred to in § 99G.30A, 321.105A, 423.26, 423.33, 423.45,
      423.57, 423A.6, 423B.6, 423C.4, 423D.4, 455B.455
        423.41  BOOKS -- EXAMINATION.
         Every retailer required or authorized to collect taxes imposed by
      this chapter and every person using in this state tangible personal
      property, services, or the product of services shall keep records,
      receipts, invoices, and other pertinent papers as the director shall
      require, in the form that the director shall require, for as long as
      the director has the authority to examine and determine tax due.  The
      director or any duly authorized agent of the department may examine
      the books, papers, records, and equipment of any person either
      selling tangible personal property or services or liable for the tax
      imposed by this chapter, and investigate the character of the
      business of any person in order to verify the accuracy of any return
      made, or if a return was not made by the person, ascertain and
      determine the amount due under this chapter.  These books, papers,
      and records shall be made available within this state for examination
      upon reasonable notice when the director deems it advisable and so
      orders.  If the taxpayer maintains any records in an electronic
      format, the taxpayer shall comply with reasonable requests by the
      director or the director's authorized agents to provide those
      electronic records in a standard record format.  The preceding
      requirements shall likewise apply to users and persons furnishing
      services enumerated in section 423.2.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, § 134, 205; 2007 Acts, ch 186, §23
         Referred to in § 99G.30A, 321.105A, 423.33, 423.45, 423.57,
      423A.6, 423B.6, 423C.4, 423D.4, 455B.455
        423.42  STATUTES APPLICABLE.
         1.  The director shall administer the taxes imposed by subchapters
      II and III in the same manner and subject to all the provisions of,
      and all of the powers, duties, authority, and restrictions contained
      in, section 422.25, subsection 4, section 422.30, and sections 422.67
      through 422.75.
         2.  All the provisions of section 422.26 shall apply in respect to
      the taxes and penalties imposed by subchapters II and III and this
      subchapter, except that, as applied to any tax imposed by subchapters
      II and III, the lien provided in section 422.26 shall be prior and
      paramount over all subsequent liens upon any personal property within
      this state, or right to such personal property, belonging to the
      taxpayer without the necessity of recording as provided in section
      422.26.  The requirements for recording shall, as applied to the
      taxes imposed by subchapters II and III, apply only to the liens upon
      real property.  When requested to do so by any person from whom a
      taxpayer is seeking credit, or with whom the taxpayer is negotiating
      the sale of any personal property, or by any other person having a
      legitimate interest in such information, the director shall, upon
      being satisfied that such a situation exists, inform that person as
      to the amount of unpaid taxes due by such taxpayer under the
      provisions of subchapters II and III.  The giving of this information
      under these circumstances shall not be deemed a violation of section
      422.72 as applied to subchapters II and III.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, § 135, 205
         Referred to in § 99G.30A, 321.105A, 421.17, 423.26, 423.33,
      423.45, 423.57, 423A.6, 423B.6, 423C.4, 423D.4, 455B.455
        423.43  DEPOSIT OF REVENUES.
         1. a.  Except as provided in subsection 2, all revenue arising
      under the operation of the use tax under subchapter III shall be
      deposited into the general fund of the state.
         b.  Subsequent to the deposit into the general fund of the
      state and after the transfer of such revenues collected under chapter
      423B, the department shall transfer one-sixth of such remaining
      revenues to the secure an advanced vision for education fund created
      in section 423F.2.  This paragraph is repealed December 31, 2029.
         2.  All revenue derived from the use tax imposed pursuant to
      section 423.26 shall be credited to the statutory allocations fund
      created under section 321.145, subsection 2.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, § 136, 205; 2005 Acts, ch 140, §13; 2008
      Acts, ch 1113, §45, 125, 129
         Referred to in § 321.145, 423.57
        423.44  REIMBURSEMENT FOR PRIMARY ROAD FUND.
      Repealed by 2008 Acts, ch 1113, § 123.  See § 321.145.
        423.45  REFUNDS -- EXEMPTION CERTIFICATES.
         1.  If an amount of tax represented by a retailer to a consumer or
      user as constituting tax due is computed upon a sales price that is
      not taxable or the amount represented is in excess of the actual
      taxable amount and the amount represented is actually paid by the
      consumer or user to the retailer, the excess amount of tax paid shall
      be returned to the consumer or user upon notification to the retailer
      by the department that an excess payment exists.
         2.  If an amount of tax represented by a retailer to a consumer or
      user as constituting tax due is computed upon a sales price that is
      not taxable or the amount represented is in excess of the actual
      taxable amount and the amount represented is actually paid by the
      consumer or user to the retailer, the excess amount of tax paid shall
      be returned to the consumer or user upon proper notification to the
      retailer by the consumer or user that an excess payment exists.
      "Proper" notification is written notification which allows a
      retailer at least sixty days to respond and which contains enough
      information to allow a retailer to determine the validity of a
      consumer's or user's claim that an excess amount of tax has been
      paid.  No cause of action shall accrue against a retailer for excess
      tax paid until sixty days after proper notice has been given the
      retailer by the consumer or user.
         3.  In the circumstances described in subsections 1 and 2, a
      retailer has the option to either return any excess amount of tax
      paid to a consumer or user, or to remit the amount which a consumer
      or user has paid to the retailer to the department.
         4. a.  The department shall issue or the seller may separately
      provide exemption certificates in the form prescribed by the
      director, including certificates not made of paper, which conform to
      the requirements of paragraph "c", to assist retailers in
      properly accounting for nontaxable sales of tangible personal
      property or services to purchasers for a nontaxable purpose.  The
      department shall also allow the use of exemption certificates for
      those circumstances in which a sale is taxable but the seller is not
      obligated to collect tax from the buyer.
         b.  The sales tax liability for all sales of tangible personal
      property and all sales of services is upon the seller and the
      purchaser unless the seller takes from the purchaser a valid
      exemption certificate stating under penalty of perjury that the
      purchase is for a nontaxable purpose and is not a retail sale as
      defined in section 423.1, or the seller is not obligated to collect
      tax due, or unless the seller takes a fuel exemption certificate
      pursuant to subsection 5.  If the tangible personal property or
      services are purchased tax free pursuant to a valid exemption
      certificate and the tangible personal property or services are used
      or disposed of by the purchaser in a nonexempt manner, the purchaser
      is solely liable for the taxes and shall remit the taxes directly to
      the department and sections 423.31, 423.32, 423.37, 423.38, 423.39,
      423.40, 423.41, and 423.42 shall apply to the purchaser.
         c.  A valid exemption certificate is an exemption certificate
      which is complete and correct according to the requirements of the
      director.
         d.  The protection afforded a seller by paragraph "b" does
      not apply to a seller who fraudulently fails to collect tax or to a
      seller who solicits purchasers to participate in the unlawful claim
      of an exemption.
         e.  If the circumstances change and as a result the tangible
      personal property or services are used or disposed of by the
      purchaser in a nonexempt manner or the purchaser becomes obligated to
      pay the tax, the purchaser is liable solely for the taxes and shall
      remit the taxes directly to the department in accordance with this
      subsection.
         5. a.  The department shall issue or the seller may separately
      provide fuel exemption certificates in the form prescribed by the
      director.
         b.  For purposes of this subsection:
         (1)  "Fuel" includes gas, electricity, water, heat, steam, and
      any other tangible personal property consumed in creating heat,
      power, or steam.
         (2)  "Fuel consumed in processing" means fuel used or consumed
      for processing including grain drying, for providing heat or cooling
      for livestock buildings or for greenhouses or buildings or parts of
      buildings dedicated to the production of flowering, ornamental, or
      vegetable plants intended for sale in the ordinary course of
      business, for use in aquaculture production, or for generating
      electric current, or in implements of husbandry engaged in
      agricultural production.
         (3)  "Fuel exemption certificate" means an exemption
      certificate given by the purchaser under penalty of perjury to assist
      retailers in properly accounting for nontaxable sales of fuel
      consumed in processing.
         (4)  "Substantial change" means a change in the use or
      disposition of tangible personal property and services by the
      purchaser such that the purchaser pays less than ninety percent of
      the purchaser's actual sales tax liability.  A change includes a
      misstatement of facts in an application made pursuant to paragraph
      "d" or in a fuel exemption certificate.
         c.  The seller may accept a completed fuel exemption
      certificate, as prepared by the purchaser, for three years unless the
      purchaser files a new completed exemption certificate.  If the fuel
      is purchased tax free pursuant to a fuel exemption certificate which
      is taken by the seller, and the fuel is used or disposed of by the
      purchaser in a nonexempt manner, the purchaser is solely liable for
      the taxes, and shall remit the taxes directly to the department and
      sections 423.31, 423.32, 423.37, 423.38, 423.39, 423.40, 423.41, and
      423.42 shall apply to the purchaser.
         d.  The purchaser may apply to the department for its review
      of the fuel exemption certificate.  In this event, the department
      shall review the fuel exemption certificate within twelve months from
      the date of application and determine the correct amount of the
      exemption.  If the amount determined by the department is different
      than the amount that the purchaser claims is exempt, the department
      shall promptly notify the purchaser of the determination.  Failure of
      the department to make a determination within twelve months from the
      date of application shall constitute a determination that the fuel
      exemption certificate is correct as submitted.  A determination of
      exemption by the department is final unless the purchaser appeals to
      the director for a revision of the determination within sixty days
      after the date of the notice of determination.  The director shall
      grant a hearing, and upon the hearing, the director shall determine
      the correct exemption and notify the purchaser of the decision by
      mail.  The decision of the director is final unless the purchaser
      seeks judicial review of the director's decision under section 423.38
      within sixty days after the date of the notice of the director's
      decision.  Unless there is a substantial change, the department shall
      not impose penalties pursuant to section 423.40 both retroactively to
      purchases made after the date of application and prospectively until
      the department gives notice to the purchaser that a tax or additional
      tax is due, for failure to remit any tax due which is in excess of a
      determination made under this section.  A determination made by the
      department pursuant to this subsection does not constitute an audit
      for purposes of section 423.37.
         e.  If the circumstances change and the fuel is used or
      disposed of by the purchaser in a nonexempt manner, the purchaser is
      solely liable for the taxes and shall remit the taxes directly to the
      department in accordance with paragraph "c".
         f.  The purchaser shall attach documentation to the fuel
      exemption certificate which is reasonably necessary to support the
      exemption for fuel consumed in processing.  If the purchaser files a
      new exemption certificate with the seller, documentation shall not be
      required if the purchaser previously furnished the seller with this
      documentation and substantial change has not occurred since that
      documentation was furnished or if fuel consumed in processing is
      separately metered and billed by the seller.
         6.  Nothing in this section authorizes any cause of action by any
      person to recover sales or use taxes directly from the state or
      extends any person's time to seek a refund of sales or use taxes
      which have been collected and remitted to the state.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, § 138, 205; 2006 Acts, ch 1158, §75, 76,
      80
         Referred to in § 321.105A, 423.33, 423.57, 423C.4
        423.46  RATE AND BASE CHANGES.
         The department shall make a reasonable effort to provide sellers
      with as much advance notice as practicable of a rate change and to
      notify sellers of legislative changes in the tax base and amendments
      to sales and use tax rules.  Failure of a seller to receive notice or
      failure of this state to provide notice or limit the effective date
      of a rate change shall not relieve the seller of its obligation to
      collect sales or use taxes for this state.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, § 139, 205
         Referred to in § 99G.30A, 423.57, 423B.6, 423C.4
        423.47  REFUNDS AND CREDITS.
         If it shall appear that, as a result of mistake, an amount of tax,
      penalty, or interest has been paid which was not due under the
      provisions of this chapter, such amount shall be credited against any
      tax due, or to become due, on the books of the department from the
      person who made the erroneous payment, or such amount shall be
      refunded to such person by the department.  A claim for refund or
      credit that has not been filed with the department within three years
      after the tax payment for which a refund or credit is claimed became
      due, or one year after such tax payment was made, whichever time is
      the later, shall not be allowed by the director.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, § 140, 205
         Referred to in § 99G.30A, 321.105A, 423.21, 423.57, 423A.6,
      423B.6, 423C.4, 423D.4, 455B.455, 476B.2, 476B.7, 476C.6
        423.48  RESPONSIBILITIES AND RIGHTS OF SELLERS
      REGISTERED UNDER THE AGREEMENT.
         1.  By registering under the agreement, the seller agrees to
      collect and remit sales and use taxes for all its taxable Iowa sales.
      Iowa's withdrawal from the agreement or revocation of its membership
      in the agreement shall not relieve a seller from its responsibility
      to remit taxes previously collected on behalf of this state.
         2.  The following provisions apply to any seller who registers
      under the agreement:
         a.  The seller may register on-line.
         b.  Registration under the agreement and the collection of
      Iowa sales and use taxes shall not be used as factors in determining
      whether the seller has nexus with Iowa for any tax.
         c.  If registered under the agreement with any other member
      state, the seller is considered to be registered in Iowa.
         d.  The seller is not required to pay registration fees or
      other charges.
         e.  A written signature from the seller is not required.
         f.  The seller may register by way of an agent.  The agent's
      appointment shall be in writing and submitted to the department if
      requested by the department.
         g.  The seller may cancel its registration at any time under
      procedures adopted by the governing board established pursuant to the
      agreement.  Cancellation does not relieve the seller of its liability
      for remitting any Iowa taxes collected.
         3.  The following additional responsibilities and rights apply to
      model sellers:
         a.  A model 1 seller's obligation to calculate, collect, and
      remit sales and use taxes shall be performed by its certified service
      provider, except for the seller's obligation to remit tax on its own
      purchases.  As the seller's agent, the certified service provider is
      liable for its model 1 seller's sales and use tax due Iowa on all
      sales transactions it processes for the seller except as set out in
      this section.  A seller that contracts with a certified service
      provider is not liable to the state for sales or use tax due on
      transactions processed by the certified service provider unless the
      seller misrepresents the types of items or services it sells or
      commits fraud.  In the absence of probable cause to believe that the
      seller has committed fraud or made a material misrepresentation, the
      seller is not subject to audit on the transactions processed by the
      certified service provider.  A model 1 seller is subject to audit for
      transactions not processed by the certified service provider.  The
      director is authorized to perform a system check of the model 1
      seller and review the seller's procedures to determine if the
      certified service provider's system is functioning properly and the
      extent to which the seller's transactions are being processed by the
      certified service provider.
         b.  A model 2 seller shall calculate the amount of tax due on
      a transaction by the use of a certified automated system, but shall
      collect and remit tax on its own sales.  A person that provides a
      certified automated system is responsible for the proper functioning
      of that system and is liable to this state for underpayments of tax
      attributable to errors in the functioning of the certified automated
      system.  A seller that uses a certified automated system remains
      responsible and is liable to the state for reporting and remitting
      tax.
         c.  A model 3 seller shall use its own proprietary automated
      system to calculate tax due and collect and remit tax on its own
      sales.  A model 3 seller is liable for the failure of its proprietary
      automated system to meet the applicable performance standard.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, § 141, 205
        423.49  RETURNS.
         1.  All model 1, 2, or 3 sellers are subject to all of the
      following return requirements:
         a.  The seller is required to file only one return per month
      for this state and for all taxing jurisdictions within this state.
         b.  The date for filing returns shall be determined under
      rules adopted by the director.  However, in no case shall the return
      be due earlier than the twentieth day of the following month.
         c.  The director shall request additional information returns.
      These returns shall not be required more frequently than every six
      months.
         2.  Any registered seller which does not have a legal obligation
      to register in this state and is not a model 1, 2, or 3 seller is
      subject to all of the following return requirements:
         a.  The seller is required to file a return within one year of
      the month of initial registration and shall file a return on an
      annual basis in succeeding years.
         b.  In addition to the return required in paragraph "a",
      if the seller accumulates more than one thousand dollars in total
      state and local tax, the seller is required to file a return in the
      following month.
         c.  The format of the return and the due date of the initial
      return and the annual return shall be determined under rules adopted
      by the department.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, § 142, 205
        423.50  REMITTANCE OF FUNDS.
         1.  Only one remittance of tax per return is required except as
      provided in this subsection.  Sellers that collect more than thirty
      thousand dollars in sales and use taxes for this state during the
      preceding calendar year shall be required to make additional
      remittances as required under rules adopted by the director.  The
      filing of a return is not required with an additional remittance.
         2.  All remittances shall be remitted electronically.
         3.  Electronic payments may be made either by automated
      clearinghouse credit or automated clearinghouse debit.  Any data
      accompanying a remittance must be formatted using uniform tax type
      and payment codes approved by the governing board established
      pursuant to the agreement.  An alternative method for making same-day
      payments shall be determined under rules adopted by the director.
         4.  If a due date falls on a legal banking holiday in this state,
      the taxes are due on the succeeding business day.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, § 143, 205
        423.51  ADMINISTRATION OF EXEMPTIONS.
         1.  The following provisions shall apply when a purchaser claims
      an exemption:
         a.  The seller shall obtain identifying information of the
      purchaser and the reason for claiming a tax exemption at the time of
      the purchase as determined by the member states acting jointly.
         b.  A purchaser is not required to provide a signature to
      claim an exemption from tax unless a paper certificate is used.
         c.  The seller shall use the standard form for claiming an
      exemption electronically as adopted jointly by the member states.
         d.  The seller shall obtain the same information for proof of
      a claimed exemption regardless of the medium in which the transaction
      occurred.
         e.  The department may authorize a system wherein the
      purchaser exempt from the payment of the tax is issued an
      identification number which shall be presented to the seller at the
      time of the sale.
         f.  The seller shall maintain proper records of exempt
      transactions and provide them to the department when requested.
         g.  The department shall administer entity-based and use-based
      exemptions when practicable through a direct pay tax permit, an
      exemption certificate, or another means that does not burden sellers.
      For the purposes of this paragraph:
         (1)  An "entity-based exemption" is an exemption based on who
      purchases the product or who sells the product.
         (2)  A "use-based exemption" is an exemption based on the
      purchaser's use of the product.
         2.  Sellers that follow the requirements of this section are
      relieved from any tax otherwise applicable if it is determined that
      the purchaser improperly claimed an exemption and that the purchaser
      is liable for the nonpayment of tax.  This relief from liability does
      not apply to a seller who does any of the following:
         a.  Fraudulently fails to collect tax.
         b.  Solicits purchasers to participate in the unlawful claim
      of an exemption.
         c.  Accepts an exemption certificate when the purchaser claims
      an entity-based exemption when the following conditions are met:
         (1)  The subject of the transaction sought to be covered by the
      exemption certificate is actually received by the purchaser at a
      location operated by the seller.
         (2)  The state provides an exemption certificate that clearly and
      affirmatively indicates that the claimed exemption is not available
      in the state.
         3. a.  A seller otherwise obligated to collect tax from a
      purchaser is relieved of that obligation if the seller obtains a
      fully completed exemption certificate or secures the relevant data
      elements of a fully completed exemption certificate within ninety
      days after the date of sale.
         b.  If the seller has not obtained an exemption certificate or
      all relevant data elements as provided in paragraph "a", the
      seller may, within one hundred twenty days after a request for
      substantiation by the department, either prove that the transaction
      was not subject to tax by other means or obtain a fully completed
      exemption certificate from the purchaser, taken in good faith.
         c.  Nothing in this subsection shall affect the ability of the
      state to require purchasers to update exemption certificate
      information or to reapply with the state to claim certain exemptions.

         d.  Notwithstanding paragraphs "a", "b", and "c",
      a seller is relieved of its obligation to collect tax from a
      purchaser if the seller obtains a blanket exemption certificate from
      the purchaser, and the seller and purchaser have a recurring business
      relationship.  For the purposes of this paragraph, a recurring
      business relationship exists when a period of no more than twelve
      months elapses between sales transactions.  The department may not
      request from the seller renewal of blanket certificates or updates of
      exemption certificate information or data elements when there is a
      recurring business relationship between the purchaser and seller.
         4.  All relief that this section provides to sellers is also
      provided to certified service providers under this chapter.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, § 144, 205; 2006 Acts, ch 1158, §77, 78,
      80; 2007 Acts, ch 179, §7

Footnotes

         2006 amendments to this section amending subsection 2 and adding
      new subsections 3 and 4 take effect January 1, 2008; 2006 Acts, ch
      1158, §80
        423.52  RELIEF FROM LIABILITY FOR SELLERS AND
      CERTIFIED SERVICE PROVIDERS.
         1.  Sellers and certified service providers using databases
      derived from zip codes or state or vendor provided address-based
      databases are relieved from liability to this state or its local
      taxing jurisdictions for having charged and collected the incorrect
      amount of sales or use tax resulting from the seller or certified
      service provider relying on erroneous data provided by this state on
      tax rates, boundaries, or taxing jurisdiction assignments.  If this
      state provides an address-based system for assigning taxing
      jurisdictions, the director is not required to provide liability
      relief for errors resulting from reliance on the information provided
      by this state if the director has given adequate notice, as
      determined by the governing board, to affected parties of the
      decision to end this relief.
         2. a.  Model 2 sellers and certified service providers are
      relieved of liability to Iowa for any failure to charge and collect
      the correct amount of sales or use tax if this failure results from
      the model 2 seller's or the certified service provider's reliance
      upon this state's certification to the governing board that Iowa has
      accepted the governing board's certification of a piece of software
      as a certified automated system.  The relief provided by this
      paragraph to a model 2 seller or certified service provider does not
      extend to a seller or provider who has incorrectly classified an item
      or transaction into the product-based exemptions portion of a
      certified automated system.  However, any model 2 seller or certified
      service provider who has relied upon an individual listing of items
      or transactions within a product definition approved by the governing
      board or Iowa may claim the relief allowed by this paragraph.
         b.  If the department determines that an item or transaction
      is incorrectly classified as to its taxability, the department shall
      notify the model 2 seller or certified service provider of the
      incorrect classification.  The model 2 seller or certified service
      provider shall have ten days to revise the classification after
      receipt of notice of the determination.  Upon expiration of the ten
      days, the model 2 seller or certified service provider shall be
      liable for the failure to collect the correct amount of sales or use
      taxes due and owing to the member state.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, § 145, 205; 2006 Acts, ch 1158, §79, 80
         Referred to in § 423.34A
        423.53  BAD DEBTS AND MODEL 1 SELLERS.
         A certified service provider may claim, on behalf of a model 1
      seller, any bad debt deduction as provided in section 423.21.  The
      certified service provider must credit or refund the full amount of
      any bad debt deduction or refund received to the seller.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, § 146, 205
        423.54  AMNESTY FOR REGISTERED SELLERS.
         1.  Subject to the limitations in subsections 2 through 6, the
      following provisions apply:
         a.  Amnesty is provided for uncollected or unpaid sales or use
      tax to a seller who registers to pay or to collect and remit
      applicable sales or use tax on sales made to purchasers in this state
      in accordance with the terms of the agreement, provided the seller
      was not so registered in this state in the twelve-month period
      preceding the commencement of Iowa's participation in the agreement.

         b.  Amnesty precludes assessment of the seller for uncollected
      or unpaid sales or use tax together with penalty or interest for
      sales made during the period the seller was not registered in this
      state, provided registration occurs within twelve months of the
      commencement of Iowa's participation in the agreement.
         c.  Amnesty shall be provided to any seller lawfully
      registered under the agreement by any other member state prior to the
      date of the commencement of Iowa's participation in the agreement.
         2.  Amnesty is not available to a seller with respect to any
      matter or matters for which the seller received notice of the
      commencement of an audit and which audit is not yet finally resolved,
      including any related administrative and judicial processes.
         3.  Amnesty is not available for sales or use taxes already paid
      or remitted or to taxes collected by the seller.
         4.  Amnesty is fully effective absent the seller's fraud or
      intentional misrepresentation of a material fact as long as the
      seller continues registration and continues payment or collection and
      remittance of applicable sales or use taxes for a period of at least
      thirty-six months.  The statute of limitations applicable to
      asserting a tax liability is tolled during this thirty-six month
      period.
         5.  Amnesty is applicable only to sales or use taxes due from a
      seller in its capacity as a seller and not to sales or use taxes due
      from a seller in its capacity as a buyer.
         6.  The director may allow amnesty on terms and conditions more
      favorable to a seller than the terms required by this section.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, § 147, 205
        423.55  DATABASES.
         The department shall provide and maintain databases required by
      the agreement for the benefit of sellers registered under the
      agreement.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, § 148, 205
         Referred to in § 423.34A
        423.56  CONFIDENTIALITY AND PRIVACY PROTECTIONS UNDER
      MODEL 1.
         1.  As used in this section:
         a.  "Anonymous data" means information that does not identify
      a person.
         b.  "Confidential taxpayer information" means all information
      that is protected under this state's laws, rules, and privileges.
         c.  "Personally identifiable information" means information
      that identifies a person.
         2.  With very limited exceptions, a certified service provider
      shall perform its tax calculation, remittance, and reporting
      functions without retaining the personally identifiable information
      of consumers.
         3.  A certified service provider may perform its services in this
      state only if the certified service provider certifies that:
         a.  Its system has been designed and tested to ensure that the
      fundamental precept of anonymity is respected.
         b.  Personally identifiable information is only used and
      retained to the extent necessary for the administration of model 1
      sellers with respect to exempt purchasers.
         c.  It provides consumers clear and conspicuous notice of its
      information practices, including what information it collects, how it
      collects the information, how it uses the information, how long, if
      at all, it retains the information, and whether it discloses the
      information to member states.  This notice shall be satisfied by a
      written privacy policy statement accessible by the public on the
      official website of the certified service provider.
         d.  Its collection, use, and retention of personally
      identifiable information is limited to that required by the member
      states to ensure the validity of exemptions from taxation that are
      claimed by reason of a consumer's status or the intended use of the
      goods or services purchased.
         e.  It provides adequate technical, physical, and
      administrative safeguards so as to protect personally identifiable
      information from unauthorized access and disclosure.
         4.  The department shall provide public notification of its
      practices relating to the collection, use, and retention of
      personally identifiable information.
         5.  When any personally identifiable information that has been
      collected and retained by the department or certified service
      provider is no longer required for the purposes set forth in
      subsection 3, paragraph "d", that information shall no longer be
      retained by the department or certified service provider.
         6.  When personally identifiable information regarding an
      individual is retained by or on behalf of this state, this state
      shall provide reasonable access by the individual to the individual's
      own information in the state's possession and a right to correct any
      inaccurately recorded information.
         7.  This privacy policy is subject to enforcement by the
      department and the attorney general.
         8.  This state's laws and rules regarding the collection, use, and
      maintenance of confidential taxpayer information remain fully
      applicable and binding.  Without limitation, the agreement does not
      enlarge or limit the state's or department's authority to:
         a.  Conduct audits or other review as provided under the
      agreement and state law.
         b.  Provide records pursuant to its examination of public
      records law, disclosure laws of individual governmental agencies, or
      other regulations.
         c.  Prevent, consistent with state law, disclosures of
      confidential taxpayer information.
         d.  Prevent, consistent with federal law, disclosures or
      misuse of federal return information obtained under a disclosure
      agreement with the internal revenue service.
         e.  Collect, disclose, disseminate, or otherwise use anonymous
      data for governmental purposes.
         9.  This privacy policy does not preclude the certification of a
      certified service provider whose privacy policy is more protective of
      confidential taxpayer information or personally identifiable
      information than is required by the agreement.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, § 149, 205; 2005 Acts, ch 3, §69
        423.57  STATUTES APPLICABLE.
         The director shall administer this subchapter as it relates to the
      taxes imposed in this chapter in the same manner and subject to all
      the provisions of, and all of the powers, duties, authority, and
      restrictions contained in sections 423.14, 423.15, 423.16, 423.17,
      423.19, 423.20, 423.21, 423.22, 423.23, 423.24, 423.25, 423.28,
      423.29, 423.31, 423.32, 423.33, 423.34, 423.34A, 423.35, 423.37,
      423.38, 423.39, 423.40, 423.41, and 423.42, section 423.43,
      subsection 1, and sections 423.45, 423.46, and 423.47.

Section History: Recent Form

         2003 Acts, 1st Ex, ch 2, § 150, 205; 2007 Acts, ch 179, §5, 6, 10;
      2008 Acts, ch 1113, §114, 122, 131

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