Branstad signs bill to reinstate equipment sales tax

DES MOINES - Gov. Terry Branstad signed legislation Thursday that will reinstate the state sales tax assessed on heavy machinery purchase made in Iowa retroactive to July 1, 2008.

At issue was a 2008 tax code rewrite that had an unintended consequence of repealing the state sales tax on heavy equipment purchases. The snafu was not discovered until last year, and the state Department of Revenue asked lawmakers to correct the mistake in a technical cleanup bill.

The change went so unnoticed that dealers continued to collect the sales tax since then, meaning if lawmakers allowed the mistake to stand the state would forego future revenue of about $7 million a year. The state also would have to provide refunds and interest in the range of $20 million to $30 million to customers who paid the sales tax to about 185 retailers of construction equipment at the time of purchase that was collected and remitted to the state not knowing the requirement had unwittingly been struck via a bureaucratic and legislative snafu.

House File 2438, which was one of 15 bills that Branstad signed on Thursday, included a provision to reinstate the state sales tax on heavy equipment retroactive to July 1, 2008.

Also, the governor signed a bill that backers say will bolster financial protections for vulnerable seniors. Senate File 2168 is a uniform power of attorney act that is expected to provide a comprehensive, detailed description of the powers and responsibilities of people granted powers of attorney - a legal document that allows someone to make decisions on behalf of someone else.

The new law would set standards and expand the number of people who can enforce those standards. Backers said the legislation addresses situations where an agent representing an older Iowan either fails to understand his or her responsibilities, misuses the power of attorney, or outright abuses the power of attorney.

Another bill Branstad signed changes an Iowa law that requires that gift cards not redeemed within five years be turned over to the State Treasurer's Office as unclaimed or abandoned property - an approach that mirrors federal law.

Under House File 2296, a card without an expiration date would remain valid in perpetuity. The measure only applies to gift cards and certificates issued by Iowa-based companies after June 30, 2014.

The bill included new provisions for certain 'closed loop” gift certificates that generally are purchased by a buyer for use by a person other than the buyer to be redeemable for merchandise only with no expiration date, fees or deductions if a holder fails to present it in a timely manner. If the card remains unprecedented, it continues in force and is not subject to a presumption of abandonment.

Branstad also signed House File 475, allowing local law enforcement authorities to seek a GPS warrant. Currently, only the Iowa Division of Criminal Investigation has the authority to ask for such warrants.