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SF2367: Sales Tax Updates

Description

Allows combined sales/use tax receipts, changes quarterly reporting and filings to monthly, and makes other process changes.  Exempts diapers (both children and adults, cloth and disposable) and feminine hygiene products from sales tax, effective 1/1/2023.  Removes the sales tax exemption for computers and associated technology used for processing and storage of data or information by a business, financial institution, or insurance company.  Makes changes to the distribution of revenue to local governments and school districts (instead of August 15 each year, monthly on the last day of the month).  Adjusts process for the Iowa Economic Development Authority to adjust sales and use tax refund incentives, requires applications be made within a year of the project's completion date, allows a business to claim a tax credit on third party developer expenses in lieu of a sales and use tax refund.  Makes changes to the workforce housing tax incentive program by allowing a housing business to claim a sales and use tax refund prior to completion of a project if included in the contract and costs are directly related to the project (and outlines process to do so; effective upon enactment). Reduces the franchise tax over five years: tax years 2023 (4.7%), 2024 (4.4%), 2025 (4.1%), 2026 (3.8%), and 2027 and beyond (3.5%). Amends the manufactured food sales tax exemption to include food ingredients (effective 1/1/2019).  Changes motor fuel reporting by allowing required electronic filings and establishing penalties.  Allows solar installations completed before 2022 and denied because the tax credit expired to be appealed if filed before June 30, 2022. There is no cap on the solar tax credits to be awarded (effective upon enactment).  Exempts Governor's $1,000 pandemic retention bonuses given to peace officers, teachers, childcare workers and correctional officers from income tax (effective upon enactment). Takes effect July 1, 2022.

Status:
Recent Actions
Position: Track
Topic/Subject: Tax

Last Modified: 08/08/2022

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