New Iowa Affiliate Nexus Law
- Jun 13, 2013 | Gail Cole
On June 11, 2013, Iowa Governor Terry E. Branstad signed into law House File 625: "An act relating to revenue and taxation, including retailers maintaining a place of business in this state for purposes of sales and use taxes, agreements relating to the collection of sales and use taxes…." The "new e-fairness" legislation takes effect July 1, 2013.
Under the nexus in this state… does any of the following…." The list includes but is not limited to:
- Sells a similar line of products as the retailer, under the same or similar name;
- Maintains an office, warehouse, or similar place of business in this state to "facilitate the delivery of property or services sold by the retailer to the retailer's customers;"
- "Uses trademarks, service marks, or trade names in Iowa similar or the same as those used by the retailer;"
- "Delivers, installs, assembles, or performs maintenance services for the retailer's customers;" and
- "Conducts any other activities in this state that are significantly associated with the retailer's ability to establish and maintain a market in this state for the retailer's sales."
The new law also stipulates that "if any person will make taxable sales of tangible personal property or furnish services to any state agency, that person shall, prior to the sale, apply for and receive a permit to collect sales or use tax…"
Speaking on behalf of the Iowa Department of Revenue, Victoria Daniels admitted that the fiscal outcome of the new law is unknown because "we just don't know for sure what's out there." However, she said the legislation will "'strengthen and codify' the elements to establish a 'sales tax nexus' for retailers conducting business in Iowa via Internet sales." (CPA Advisor).
The e-fairness bill was strongly backed by the Iowa Retail Federation, the Iowa Grocers Association, and the Iowa Alliance for Main Street Fairness. Some 232 small businesses in the Hawkeye State have declared their support for the new law.
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