Senate File 73 - Introduced SENATE FILE 73 BY ZAUN , WARD , HAHN , FEENSTRA , JOHNSON , KAPUCIAN , SORENSON , and SEYMOUR A BILL FOR An Act exempting from the sales tax the sales price of a 1 physical exercise club contract. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1022SS (4) 84 tw/sc

S.F. 73 Section 1. Section 423.3, Code 2011, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 96. The sales price of a physical exercise 3 club contract. For purposes of this subsection, “physical 4 exercise club contract” means the same as defined in section 5 552.1, and “sales price” includes “contract price” as defined 6 in section 552.1. 7 EXPLANATION 8 This bill creates a sales tax exemption for physical 9 exercise club contracts. The term “physical exercise club 10 contract” is defined in Code section 552.1 and means an 11 agreement by which a buyer is entitled to membership in a 12 physical exercise club or use of the services or facilities 13 of a physical exercise club. The exemption applies to the 14 “sales price” of such contracts, which is defined in Code 15 section 423.1. However, because Code section 552.1 uses 16 the term “contract price” in relation to physical exercise 17 club contracts, the definition of the term “sales price” is 18 supplemented for purposes of the exemption to include the 19 meaning of “contract price.” 20 By operation of Code section 423.6, an item exempt from the 21 imposition of the sales tax is also exempt from the use tax 22 imposed in Code section 423.5. 23 -1- LSB 1022SS (4) 84 tw/sc 1/ 1