The Truck Renting and Leasing Association (TRALA) is supporting legislation in Iowa that would limit to three years the amount of time an owner of a commercial motor vehicle would be required to retain records for a use tax exemption.
Currently, there are no specified recordkeeping requirements relative to the Interstate Commerce Exemption, codified in Iowa Statutes §321.105A(2)(c)(5). This has opened the door to recordkeeping demands by the Iowa Department of Revenue in recent audit situations. House Bill 2156 would create a statute of limitations that would limit an audit to the previous three years. This would bring recordkeeping requirements for the Interstate Commerce Exemption into line with Iowa use tax requirements.
TRALA has worked with the Iowa Motor Truck Association (IMTA) and mutual member companies to gather support for this proposal in the Iowa legislature. Iowa’s Interstate Commerce Exemption states that commercial vehicles weighing 26,000 pounds or more are exempt from the use tax if they accrue at least 25% of their mileage out of state. The vehicles would have to meet these criteria for the first four years they are in operation. There are no explicit recordkeeping requirements in the statutes relative to this exemption, and the Iowa Department of Revenue has demanded that some companies produce records for the previous 10 years. In the absence of records, the auditors have told TRALA members that they would be presumed as not qualifying for the exemption.
TRALA supports current requirements necessary to meet the Interstate Commerce Exemption from the use tax. Passage of HB 2156 would bring recordkeeping requirements for this exemption in to line with those of the Iowa use tax itself, the group said.