HOUSE FILE 448

BY  HANSON, KELLEY, WESSEL-KROESCHELL, GASKILL, STECKMAN, and ISENHART

A BILL FOR

An Act providing a sales tax exemption for the sales price of high-efficiency vehicle conversion kits.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  Section 423.3, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  96.
  a.  The sales price from the sale of high-efficiency vehicle conversion kits.
   b.  For purposes of this subsection, the following terms have the following meanings:
   (1)  “Comparable conventional vehicle” means a motor vehicle of the same make, model year, weight, size, and intended use that has not been converted to a high-efficiency vehicle.
   (2)  “Conversion kit” means the tangible personal property and directly related installation services necessary for the conversion of a conventional motor vehicle to a high-efficiency vehicle.
   (3)  “Fuel economy” means the average fuel economy of a vehicle, as computed by the United States environmental protection agency pursuant to 40 C.F.R. pt. 600.
   (4)  “High-efficiency vehicle” means a motor vehicle capable of being powered entirely by an onboard source of electricity that when operational provides at least seventy-five percent more fuel economy than a comparable conventional vehicle.
EXPLANATION
   This bill provides a sales tax exemption for the sales price of high-efficiency vehicle conversion kits.
   The bill defines certain terms for purposes of the exemption. More specifically, the bill provides that a “conversion kit” includes both the property and the installation services necessary for converting conventional vehicles and that a “high-efficiency vehicle” is a motor vehicle capable of being powered entirely by an onboard source of electricity that when operational provides at least 75 percent more fuel economy than a comparable conventional vehicle.
   By operation of Code section 423.6, an item exempt from the imposition of the sales tax is also exempt from the use tax imposed in Code section 423.5.