Iowa Code Title X. Financial Resources [Chs. 421-454] § 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:

4. For 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. For 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.