Senate File 393 - Introduced SENATE FILE BY DANIELSON Passed Senate, Date Passed House, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act providing a sales tax refund for up to five years for 2 power used in the operation of information technology 3 facilities. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2313SS 82 6 ak/es/88 PAG LIN 1 1 Section. 1. Section 423.4, Code 2007, is amended by 1 2 adding the following new subsection: 1 3 NEW SUBSECTION. 8. a. The owner of an information 1 4 technology facility in this state may make an annual 1 5 application for up to five consecutive years to the department 1 6 for the refund of the sales or use tax upon the sales price of 1 7 all sales of fuel used in creating heat, power, and steam for 1 8 processing or generating electrical current, or from the sale 1 9 of electricity consumed by computers, machinery, or other 1 10 equipment for operation of the technology facility. 1 11 b. An information technology facility shall qualify for 1 12 the refund in this subsection if the facility's six=digit 1 13 North American industry classification system number indicates 1 14 that the facility is primarily engaged in providing 1 15 computer=related services. 1 16 c. The refund may be obtained only in the following manner 1 17 and under the following conditions: 1 18 (1) The applicant shall use forms furnished by the 1 19 department. 1 20 (2) The applicant shall separately list the amounts of 1 21 sales and use tax paid during the reporting period. 1 22 (3) The applicant may request when the refund begins, but 1 23 it must start on the first day of a month and proceed for a 1 24 continuous twelve=month period. 1 25 d. In determining the amount to be refunded, if the dates 1 26 of the utility billing or meter reading cycle for the sale or 1 27 furnishing of metered gas and electricity is on or after the 1 28 first day of the first month through the last day of the last 1 29 month of the refund year, the full amount of tax charged in 1 30 the billings shall be refunded. In determining the amount to 1 31 be refunded, if the dates of the sale or furnishing of fuel 1 32 for purposes of commercial energy and the delivery of the fuel 1 33 is on or after the first day of the first month through the 1 34 last day of the last month of the refund year, the full amount 1 35 of tax charged in the billings shall be refunded. 2 1 e. To receive refunds during the five=year period, the 2 2 applicant shall file a refund claim within three months after 2 3 the end of each refund year. 2 4 f. The refund in this subsection applies only to state 2 5 sales and use tax paid and does not apply to local option 2 6 sales and services taxes imposed pursuant to chapters 423B and 2 7 423E. 2 8 EXPLANATION 2 9 This bill provides an annual sales tax refund for up to 2 10 five years for an information technology facility on the sale 2 11 price of all sales of fuels used in creating heat, power, and 2 12 steam for processing or for generating electrical current, or 2 13 from the sale of electricity consumed by computers, machinery, 2 14 or other equipment for operation of the facility. 2 15 The bill requires that to qualify for the refund an 2 16 information technology facility must be classified under the 2 17 North American industry classification system number 541519, 2 18 which includes companies that provide computer=related 2 19 services including computer disaster recovery services and 2 20 software installation services. 2 21 The bill sets out specific requirements in order for an 2 22 information technology facility to obtain a tax refund. The 2 23 criteria include that the applicant shall use forms furnished 2 24 by the department of revenue; the applicant shall separately 2 25 list the amounts of sales and use tax paid during the 2 26 reporting period; and the applicant may request when the 2 27 refund begins, but it must start on the first day of a month 2 28 and proceed for a continuous 12=month period. 2 29 The bill also provides that in determining the amount of 2 30 refund, if the date of the utility billing or meter reading 2 31 cycle for the sale or furnishing of metered gas and 2 32 electricity occurs during the refund year, then the amount of 2 33 tax on the bill is refundable. If the sale or furnishing of 2 34 fuel and the delivery of the fuel occur during the refund 2 35 year, then the tax is refunded. 3 1 The bill requires that in order to receive refunds during 3 2 the five=year refund period, an applicant shall make refund 3 3 requests within three months after the end of each refund 3 4 year. The bill also states that the refund only applies to 3 5 state sales and use tax and not to local option sales and 3 6 services taxes in Code chapters 423B and 423E. 3 7 LSB 2313SS 82 3 8 ak:sc/es/88