Iowa Code § 423C.3 — Tax on rental of automobiles — collection and remittance of tax

1. A tax of five percent is imposed upon the rental price of an automobile if the rental transaction is subject to the sales tax under chapter 423, subchapter II , or the use tax under chapter 423, subchapter III . The tax shall not be imposed on any rental transaction not taxable under the state sales tax, as provided in section 423.3 , or the state use tax, as provided in section 423.6 , on automobile rental receipts. 2. The tax imposed under subsection 1 shall be collected and remitted to the department by all persons required to collect state sales and use tax on the rental transaction under chapter 423 . 3. A person is not required to collect and remit the tax imposed under this chapter if the person meets all of the following requirements: a. The person or any affiliate of the person is not an automobile provider . b. The person or any affiliate of the person facilitates the renting or sharing of an automobile by doing all of the following: (1) The person owns, operates, or controls a peer -to -peer automobile sharing marketplace that allows a host or an automobile provider who is not an affiliate of the person to offer or list an automobile for sharing or rent on the marketplace. F or purposes of this paragraph, it is immaterial whether or not the automobile provider has a tax permit under this chapter or chapter 423 or whether the automobile is owned by a natural person or by a business entity . (2) The person or affiliate of the person collects or processes the rental price charged to the user . c. The only sales the person and affiliates of the person facilitate that are subject to tax under chapter 423 are sales of a transportation service under section 423.2, subsection 6 , paragraph “bf ” , or section 423.5, subsection 1 , paragraph “d” , consisting of the rental of vehicles subject to registration which are registered for a gross weight of thirteen tons or less for a period of sixty days or less. 4. F or any rental transaction for which a person is required to or elects to collect and remit the tax under this chapter , the person shall also be liable for the collection and remittance of any sales or use tax due on that transaction under section 423.2, subsection 6 , paragraph “bf ” , or section 423.5, subsection 1 , paragraph “d” , notwithstanding any other provision to the contrary in chapter 423 . 5. F or any rental transaction for which the person is not required to collect and remit the tax under this chapter as provided under subsection 3 , the automobile provider shall be solely liable for any amount of uncollected or unremitted tax under this chapter and chapter 423 . 92 Acts, ch 1006, §4 ; 92 Acts, 2nd Ex, ch 1001, §210 C93, §422C.3 2003 Acts, 1st Ex, ch 2, §190, 203, 205 C2005, §423C.3 2018 Acts, ch 1161, §253, 255