H.F. 2164 Section 1. Section 423.3, Code Supplement 2011, is amended 1 by adding the following new subsection: 2 NEW SUBSECTION . 96. a. The sales price of materials, 3 supplies, or equipment sold to a substance abuse treatment 4 provider if such materials, supplies, or equipment shall be 5 directly and primarily used by the substance abuse treatment 6 provider in the treatment of substance abuse. 7 b. For purposes of this subsection: 8 (1) “Substance abuse” means the same as defined in section 9 125.2. 10 (2) “Substance abuse treatment provider” means any person 11 maintaining or conducting any chemical substitutes or 12 antagonists program, residential program, or nonresidential 13 outpatient program, the primary purpose of which is the 14 treatment and rehabilitation of substance abusers or substance 15 abuse, which program is licensed by the Iowa department of 16 public health under section 125.13, subsection 1, or which 17 is exempt from licensure under section 125.13, subsection 2, 18 or which is a state mental health institute designated under 19 chapter 226 that provides substance abuse treatment. 20 EXPLANATION 21 This bill provides a sales tax exemption for the sales price 22 of materials, supplies, and equipment sold to a substance abuse 23 treatment provider, as defined in the bill, if the materials, 24 supplies, and equipment are directly and primarily used by 25 the substance abuse treatment provider in the treatment of 26 substance abuse. 27 By operation of Code section 423.6, an item exempt from the 28 imposition of the sales tax is also exempt from the use tax 29 imposed in Code section 423.5. 30 -1- LSB 5489YH (1) 84 mm/sc 1/ 1