Senate File 447
SENATE FILE
BY COMMITTEE ON WAYS AND MEANS
(SUCCESSOR TO SSB 1156)
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to the state sales and use tax exemption for the
2 use of sorbents in processing.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
4 TLSB 2953SV 80
5 mg/pj/5
PAG LIN
1 1 Section 1. Section 422.42, subsection 15, Code 2003, is
1 2 amended to read as follows:
1 3 15. "Retail sale" or "sale at retail" means the sale to a
1 4 consumer or to any person for any purpose, other than for
1 5 processing, for resale of tangible personal property or
1 6 taxable services, or for resale of tangible personal property
1 7 in connection with taxable services; and includes the sale of
1 8 gas, electricity, water, and communication service to retail
1 9 consumers or users; but does not include agricultural breeding
1 10 livestock and domesticated fowl; and does not include
1 11 commercial fertilizer, agricultural limestone, herbicide,
1 12 pesticide, insecticide, including adjuvants, surfactants, and
1 13 other products directly related to the application enhancement
1 14 of those products, and food, medication, or agricultural drain
1 15 tile, including installation of agricultural drain tile, any
1 16 of which are to be used in disease control, weed control,
1 17 insect control, or health promotion of plants or livestock
1 18 produced as part of agricultural production for market; and
1 19 does not include electricity, steam, or any taxable service
1 20 when purchased and used in the processing of tangible personal
1 21 property intended to be sold ultimately at retail.
1 22 PARAGRAPH DIVIDED. When used by a manufacturer of food
1 23 products, carbon dioxide in a liquid, solid, or gaseous form,
1 24 electricity, steam, and other taxable services are sold for
1 25 processing when used to produce marketable food products for
1 26 human consumption, including but not limited to, treatment of
1 27 material to change its form, context, or condition, in order
1 28 to produce the food product, maintenance of quality or
1 29 integrity of the food product, changing or maintenance of
1 30 temperature levels necessary to avoid spoilage or to hold the
1 31 food product in marketable condition, maintenance of
1 32 environmental conditions necessary for the safe or efficient
1 33 use of machinery and material used to produce the food
1 34 product, sanitation and quality control activities, formation
1 35 of packaging, placement into shipping containers, and movement
2 1 of the material or food product until shipment from the
2 2 building of manufacture.
2 3 PARAGRAPH DIVIDED. Tangible personal property is sold for
2 4 processing within the meaning of this subsection only when it
2 5 is intended that the property will, by means of fabrication,
2 6 compounding, manufacturing, or germination become an integral
2 7 part of other tangible personal property intended to be sold
2 8 ultimately at retail; or will be consumed as fuel in creating
2 9 heat, power, or steam for processing including grain drying,
2 10 or for providing heat or cooling for livestock buildings or
2 11 for greenhouses or buildings or parts of buildings dedicated
2 12 to the production of flowering, ornamental, or vegetable
2 13 plants intended for sale in the ordinary course of business,
2 14 or for use in cultivation of agricultural products by
2 15 aquaculture, or for generating electric current, or in
2 16 implements of husbandry engaged in agricultural production; or
2 17 the property is a chemical, solvent, sorbent of matter or
2 18 energy, or reagent, which is directly used and is consumed,
2 19 dissipated, or depleted, in processing personal property which
2 20 is intended to be sold ultimately at retail or consumed in the
2 21 maintenance or repair of fabric or clothing, and which may not
2 22 become a component or integral part of the finished product.
2 23 The distribution to the public of free newspapers or shoppers
2 24 guides is a retail sale for purposes of the processing
2 25 exemption.
2 26 Sec. 2. Section 423.1, subsection 15, paragraph c, Code
2 27 2003, is amended to read as follows:
2 28 c. Chemicals, solvents, sorbents of matter or energy, or
2 29 reagents, which are directly used and are consumed,
2 30 dissipated, or depleted in processing personal property, which
2 31 is intended to be sold ultimately at retail, and which may not
2 32 become a component or integral part of the finished product.
2 33 EXPLANATION
2 34 Under the sales and use tax provisions, property used in
2 35 processing tangible personal property for sale at retail is
3 1 exempt when purchased. Sorbents are such property. This bill
3 2 specifies that sorbents of matter or sorbents of energy are
3 3 both considered property used in processing.
3 4 LSB 2953SV 80
3 5 mg/pj/5