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Text: SSB00254                          Text: SSB00256
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Senate Study Bill 255

Bill Text

  1  1    Section 1.  Section 422.45, Code 1997, is amended by adding
  1  2 the following new subsection:
  1  3    NEW SUBSECTION.  7A.  Refunds of sales and use taxes paid
  1  4 on transportation construction projects let by the state
  1  5 department of transportation are subject to the special
  1  6 provisions of this subsection.
  1  7    a.  A contractor awarded a contract for a transportation
  1  8 construction project is considered the consumer of all
  1  9 building materials, building supplies, and equipment and shall
  1 10 pay sales tax to the supplier or remit consumer use tax
  1 11 directly to the department.
  1 12    b.  The contractor is not required to file information with
  1 13 the state department of transportation stating the amount of
  1 14 goods, wares, or merchandise, or services rendered, furnished,
  1 15 or performed and used in the performance of the contract or
  1 16 the amount of sales or use tax paid.
  1 17    c.  The state department of transportation shall file a
  1 18 refund claim based on a formula that considers the following:
  1 19    (1)  The quantity of materials to complete the contract,
  1 20 and quantities of items of work.
  1 21    (2)  The estimated cost of the materials included in the
  1 22 items of work, and the state sales or use tax to be paid
  1 23 according to the tax rate in effect in section 422.43.
  1 24    The quantity of materials shall be determined after each
  1 25 letting based on the contract quantities of all items of work
  1 26 let to contract.  The quantity of individual component
  1 27 materials required for each item shall be determined and
  1 28 maintained in a database.  The total quantities of materials
  1 29 shall be determined by multiplying the quantity of component
  1 30 materials for each contract item of work by the total
  1 31 quantities of each contract item for each letting.  Where
  1 32 variances exist in the cost of materials, the lowest cost
  1 33 shall be used as the base cost.
  1 34    d.  Only the state sales or use tax is refundable.  Local
  1 35 option taxes paid by the contractor are not refundable.  
  2  1                           EXPLANATION
  2  2    This bill amends Code section 422.45, regarding sales and
  2  3 use tax, to include special provisions regarding the refund of
  2  4 sales and use taxes paid on state department of transportation
  2  5 construction projects.  Under the provision, a contractor is
  2  6 considered the consumer of materials, supplies, and equipment
  2  7 and must pay sales or use taxes directly to the supplier or
  2  8 the department.  Contractors are not, however, required to
  2  9 file information with the department regarding the amount of
  2 10 goods, merchandise, or services rendered, furnished, or
  2 11 performed.  The department shall file for the sales or use tax
  2 12 refund based upon a formula that shall include consideration
  2 13 of the quantity of materials and items of work necessary to
  2 14 complete the contract and the estimated cost of the materials
  2 15 included in the items of work and the rate of tax paid.  The
  2 16 department is to maintain information on the materials needed
  2 17 and used for each contract in a database.  The provision
  2 18 prohibits refunds on local option sales taxes paid by the
  2 19 contractor.  
  2 20 LSB 2720SC 77
  2 21 mk/cf/24

Text: SSB00254                          Text: SSB00256
Text: SSB00200 - SSB00299               Text: SSB Index
Bills and Amendments: General Index     Bill History: General Index

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