Text: HF00066 Text: HF00068 Text: HF00000 - HF00099 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Section 1. Section 422.45, subsection 27, Code 1997, is
1 2 amended by striking the subsection and inserting in lieu
1 3 thereof the following:
1 4 27. a. The gross receipts from the sale or rental of
1 5 computers, machinery, and equipment, including replacement
1 6 parts, and materials used to construct or self-construct
1 7 computers, machinery, and equipment if such items are any of
1 8 the following:
1 9 (1) Directly and primarily used in processing by a
1 10 manufacturer.
1 11 (2) Directly and primarily used to maintain the integrity
1 12 of the product or to maintain unique environmental conditions
1 13 required for either the product or the computers, machinery,
1 14 and equipment used in processing by a manufacturer, including
1 15 test equipment used to control quality and specifications of
1 16 the product.
1 17 (3) Directly and primarily used in research and
1 18 development of new products or processes of processing.
1 19 (4) Computers used in processing or storage of data or
1 20 information by an insurance company, financial institution, or
1 21 commercial enterprise.
1 22 (5) Directly and primarily used in recycling or
1 23 reprocessing of waste products.
1 24 (6) Pollution control equipment used by a manufacturer,
1 25 including but not limited to that required or certified by an
1 26 agency of this state or of the United States government.
1 27 b. The gross receipts from the sale of fuel used in
1 28 creating heat, power, steam, or for generating electrical
1 29 current, or from the sale of electricity, directly and
1 30 primarily used in processing by a manufacturer.
1 31 c. However, the gross receipts from the sale or rental of
1 32 the following shall not be exempt from the tax imposed by this
1 33 division:
1 34 (1) Hand tools.
1 35 (2) Point-of-sale equipment and computers.
2 1 (3) Industrial machinery, equipment and computers,
2 2 including pollution control equipment, within the scope of
2 3 section 427A.1, subsection 1, paragraphs "h" and "i".
2 4 d. As used in this subsection:
2 5 (1) "Commercial enterprise" includes businesses and
2 6 manufacturers conducted for profit and includes centers for
2 7 data processing services to insurance companies, financial
2 8 institutions, businesses, and manufacturers but excludes
2 9 professions and occupations and nonprofit organizations.
2 10 (2) "Financial institution" means as defined in section
2 11 527.2.
2 12 (3) "Insurance company" means an insurer organized or
2 13 operating under chapter 508, 514, 515, 518, 518A, 519, or 520,
2 14 or authorized to do business in Iowa as an insurer or a
2 15 licensed insurance agent under chapter 522.
2 16 (4) "Manufacturer" means as defined in section 428.20, but
2 17 also includes contract manufacturers. A contract manufacturer
2 18 is a manufacturer that otherwise falls within the definition
2 19 of manufacturer under section 428.20, except that a contract
2 20 manufacturer does not sell the tangible personal property the
2 21 contract manufacturer processes on behalf of other
2 22 manufacturers.
2 23 (5) "Processing" means a series of operations in which
2 24 materials are manufactured, refined, purified, created,
2 25 combined, or transformed by a manufacturer, ultimately into
2 26 tangible personal property. Processing encompasses all
2 27 activities commencing with the receipt or producing of raw
2 28 materials by the manufacturer and ending at the point products
2 29 are delivered for shipment or transferred from the
2 30 manufacturer. Processing includes but is not limited to
2 31 refinement or purification of materials; treatment of
2 32 materials to change their form, context, or condition;
2 33 maintenance of the quality or integrity of materials,
2 34 components, or products; maintenance of environmental
2 35 conditions necessary for materials, components, or products;
3 1 quality control activities; and construction of packaging and
3 2 shipping devices, placement into shipping containers or any
3 3 type of shipping devices or medium, and the movement of
3 4 materials, components, or products until shipment from the
3 5 processor.
3 6 EXPLANATION
3 7 This bill rewrites the Code provision exempting certain
3 8 computers, machinery, equipment, electricity, and other items
3 9 related to the manufacturing process from the state sales and
3 10 use tax by defining those manufacturing activities which give
3 11 rise to the exemption.
3 12 LSB 1676YH 77
3 13 sc/sc/14
Text: HF00066 Text: HF00068 Text: HF00000 - HF00099 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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