The Department of Revenue previously submitted the following proposed rules to the Iowa Legislature. The following rules have been adopted and filed.
Adopted and Filed Rules
Adopted and Filed Rules
The Department regularly audits or examines returns filed and tax remitted for the tax imposed on tobacco products under Iowa Code chapter 453A, subchapter II. The Department enacted new subrule 83.4(2) so all taxpayers know how the Department will calculate tax due for sales of certain tobacco products. Specifically, this rule making establishes how the Department will determine whether products are identical and priced at a discount and provides several examples.
This rule making is intended to implement a hearing procedure when the Director of Revenue intends to remove a member of the local board of review under Iowa Code section 441.32(2) as amended by 2021 Iowa Acts, House File 871, section 29, and the board member requests a hearing. This rule making describes the process for requesting a hearing, the governing procedures of the hearing, the contents of the request for hearing, and the burden of proof at such a hearing.
The Department has several chapters of rules that implement a variety of sales tax administrative procedures set forth in Iowa Code chapter 423. This rule making updates those chapters to make a variety of non substantive changes and also amends rules in other chapters to update affected cross-references.
During the 2021 Legislative Session, the Department requested that the Legislature modify Iowa Code section 421.27, which sets forth penalties and penalty waivers related to the filing of tax returns and payment of tax. The changes were enacted and signed into law as 2021 Iowa Acts, Senate File 608, effective July 1, 2021. The Department has amended its rules implementing Iowa Code section 421.27 to reflect the changes made by Senate File 608.
The Department revised Iowa Code section 321.105A in 2021 Iowa Acts, Senate File 366, which was enacted by the Legislature, signed into law by Governor Reynolds, and effective July 1, 2021. This new Chapter 34 is significantly updated from the prior chapter and includes many examples. Once these rules are in effect, all parties should discontinue the use of the UT-510 manual as guidance and refer to these rules instead.
Iowa Code section 423.3(49) provides a limited exemption for manufacturers producing “marketable food products for human consumption.” The phrase “marketable food products for human consumption” had never been defined in the Iowa Code or the Department’s administrative rules. The Department’s long-standing interpretation of the term has been that only final food products, not food ingredients, are “marketable food products for human consumption.” The Department has adopted this definition. No changes to the NOIA for this rule making were made.
Item 1 of this rule making amends Chapter 68 primarily to reflect the enactment of 2020 Iowa Acts, Senate File 2403. Notably, Senate File 2403 changed tax rates for gasoline and biodiesel-blended fuel rated B11 or higher and created new classifications of ethanol blended gasolines. Senate File 2403 also modified the report the Department uses to calculate motor fuel distribution percentages used to determine these rates, switching from fuel tax monthly reports to an annual retailers’ report. Items 2 through 13 reflect cleanup of outdated citations or terms throughout the chapter.
In the design of its new tax administration system, the Department is incorporating its voluntary disclosure agreement (VDA) process into the filing system. In reviewing relevant rules for the VDA program, the Department noticed the list of permitted tax types does not include all excise taxes and fees. This rule making adds excise taxes and fees that were not part of the Iowa Code the last time subrule 3.1(3) was updated: the water service excise tax, equipment excise tax, state and local hotel and motel taxes, automobile rental excise tax, and prepaid wireless 911 surcharge.
The Department is incorporating the sales and use tax refund request process for data center businesses into its new tax administration system. The existing rule implementing the refund for data center businesses requires that an affidavit be filed by the business before the business can file a refund claim. This rule making allows businesses to submit the refund claim form and the affidavit simultaneously, after which the Department will review the affidavit prior to reviewing the refund claim form.
This rule making updates rule 701—38.15(422) to reflect certain changes to Iowa Code section 422.21(7) and to provide taxpayers with additional clarity when seeking relief from joint and several liability for tax, penalty, and interest owed to the Department.