S.F. No. 3789 - Sales Tax Vendor Allowance

• Establishes a new vendor allowance under section 297A.816 allowing retailers and sellers to retain a portion of collected sales tax to compensate for collection and administration costs.

• Vendor allowance rates are tiered based on annual sales tax liability: 2 percent for vendors under $60,000, 1 percent for vendors between $60,000 and $600,000, and 0.75 percent for vendors over $600,000 in the fiscal year ending June 30.

• Minimum vendor allowance per reporting period is the lesser of $10 or the amount of eligible taxes collected, with use taxes on the seller's own purchases excluded from the allowance calculation.

• Modifies the definition of "net liability" in section 289A.20 to exclude the vendor allowance amount when calculating sales and use tax obligations.

• All provisions are effective for sales and purchases made after June 30, 2024, and require timely reporting and remittance of taxes minus the allowance to qualify.