HF 2473 (LSB 5176HV (1) 87)

HOUSE FILE 2473

BY  COMMITTEE ON WAYS AND MEANS

(SUCCESSOR TO HF 2069)

A BILL FOR

An Act modifying the sales and use tax exemption for the sale of certain component parts attached to or services performed on aircraft.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 423.3, subsections 74 and 76, Code 2018, are amended to read as follows:
   74.  The sales price from the sale or rental of aircraft for use in a scheduled interstate federal aviation administration certificated air carrier operation.
   76.  The sales price from the sale or rental of tangible personal property permanently affixed or attached as a component part of the aircraft, including but not limited to repair or replacement materials or parts; and the sales price of all services used for aircraft repair, remodeling, and maintenance services when such services are performed on aircraft, aircraft engines, or aircraft component materials or parts. For the purposes of this exemption, “aircraft” means aircraft used in nonscheduled interstate federal aviation administration certificated air carrier operation operating under 
14 C.F.R. ch. 1, pt. 135
 the same as defined in section 328.1.
    Sec. 2.  Section 423.3, subsection 75, Code 2018, is amended by striking the subsection.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   Current law exempts from the Iowa sales and use tax the sale, rental, or use of aircraft component parts permanently attached to an aircraft, including repair or replacement materials or parts, and repair, remodeling, and maintenance services used on an aircraft, aircraft engine, or aircraft component materials or parts, provided the aircraft is used in either a scheduled or nonscheduled interstate federal aviation administration (FAA) certified air carrier operation (scheduled or nonscheduled FAA operation). This bill removes the requirement that the aircraft be used in a scheduled or nonscheduled FAA operation to qualify for the exemption. The sale, rental, or use of the component parts and services described above will be exempt from the sales and use tax when permanently attached to or performed on any aircraft. The bill defines “aircraft” to mean the same as it does for purposes of Code chapter 328 (aeronautics), which includes any contrivance now known, or hereafter invented, used or designed for navigation of or flight in the air, for the purpose of transporting persons or property, or both. 
   The bill also makes nonsubstantive changes to Code sections 423.3(74) and 423.3(75) to strike or move similar language relating to the sales and use tax exemption described in the bill and to the sales and use tax exemption for the sale or rental of aircraft used in a scheduled FAA operation.