Current law requires a person applying for an assessor certification
examination to submit a $20 fee with the application. A person applying for a
renewal of an assessor certification pays a $20 recertification fee with the
application. The bill allows DOR to determine the amount of the fee for an assessor
certification examination on the basis of DOR's estimate of the actual cost to
administer and grade the examination, but the fee may not exceed $75. The bill also
allows DOR to determine the recertification fee.

The property tax levy limit under current law does not apply to the amount that
a city, village, or town levies to pay for charges assessed by a joint fire department
if the current year increase in such charges is equal to or less than the percentage
change in the U.S. consumer price index for all urban consumers, U.S. city average,
as determined by the U.S. Department of Labor, for the 12 months ending on
September 30 of the year of the levy, plus 2 percent. The bill modifies the consumer
price index provision so that it is for the 12 months ending on August 31 of the year
of the levy.

Current law allows an individual with less than $20,200 of federal adjusted
gross income to claim a disability income subtraction on the individual's state tax

return, if the individual is at least 65 years of age and retired on disability, and, when
the individual retired, was permanently and totally disabled. For a married couple
filing a joint return, each spouse may claim the credit if they meet the criteria and
their combined income is less than $25,400. The bill replaces an obsolete reference
to the federal Internal Revenue Code with the language used to determine the
claimant's eligibility that existed under the obsolete reference.

Under current law, an individual who is under the age of 62 and who does not
have a disability must have earned income in order to claim the homestead credit.
However, current law does not define earned income for purposes of claiming the
credit. The bill defines “earned income” for purposes of claiming the homestead
credit as wages, salaries, tips, and other employee compensation that may be
included in federal adjusted gross income for the taxable year, plus the amount of net
earnings from self-employment.

Current law also requires individuals who wish to claim the homestead credit
to add certain disqualified losses to homestead income in order to determine
eligibility to claim the credit. However, the requirement does not apply to an
individual whose primary income is from farming and whose farming operation
generates less than $250,000 in the year to which the claim relates. The bill clarifies
that an individual's primary income is from farming if the individual's gross income
from farming for the year in which the claim relates is greater than 50 percent of the
individual's total gross income from all sources for that year.

Under current law, in order to conduct an audit of a “pass-through” entity, DOR
must interact with each member of the entity. A pass-through entity is an entity
such as a partnership or limited liability company that passes the income of the
entity on to the individual partners or members. The bill requires a pass-through
entity to designate a member to act on the entity's behalf so that DOR may conduct
an audit without having to interact with each individual member.

Under current law, a taxpayer who receives a final audit determination from
DOR has 90 days to report to DOR any changes or corrections related to that
determination. The bill increases the time for providing that report to 180 days.

The bill modifies the procedure for transferring the historic rehabilitation tax
credit so that the person transferring the credit may file a claim for more than one
taxable year.

The bill modifies current law so that nonresidents who derive business income
from services performed both in and outside this state determine the amount that
is subject to state income or franchise tax by using the same apportionment formula
under current law that applies to resident entities.

Current law provides that persons providing landscaping, printing,
fabricating, processing, or photographic services or performing services to tangible
personal property may purchase for resale, without paying the sales tax, items that
the person will transfer to a customer in conjunction with providing a service that
is subject to the sales tax. The bill provides that the exemption applies regardless
of whether the service is taxable.

The bill modifies the sales and use tax exemption for churches, religious
organizations, and certain nonprofit organizations to conform with DOR's current
practice with regard to the administration of the exemption. The bill provides that
the exemption applies to organizations that are exempt from federal taxation under
section 501 (c) (3) of the Internal Revenue Code and have received a determination
letter for the Internal Revenue Service. The bill also provides that the exemption
applies to churches and religious organizations that meet the requirements of
section 501 (c) (3) of the Internal Revenue Code, but are not required to apply for or
obtain tax-exempt status from the IRS.

Under current law, an out-of-state retailer that has annual gross sales into this
state in excess of $100,000 or 200 or more annual separate sales transactions into
this state must register with DOR and collect the sales tax on those sales and
transactions. The determination of the annual gross sales and transactions is based
on the retailer's taxable year for federal income tax purposes.

Under the bill, an out-of-state retailer that has annual gross sales into this
state in excess of $100,000 in the previous or current calendar year must register
with DOR and collect the sales tax on those sales.

The bill allows the state auditor and Legislative Audit Bureau to examine sales
and use tax returns and related documents to the extent necessary for the bureau
to carry out its duties.