House
Study
Bill
660
-
Introduced
HOUSE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
WAYS
AND
MEANS
BILL
BY
CHAIRPERSON
SANDS)
A
BILL
FOR
An
Act
relating
to
the
administration
of
the
sales
and
use
1
taxes
by
modifying
provisions
related
to
property
purchased
2
for
resale
and
by
creating
a
sales
tax
exemption
for
certain
3
items
purchased
for
use
in
providing
vehicle
wash
and
wax
4
services
and
including
effective
date
provisions.
5
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
6
TLSB
5512YC
(3)
84
mm/sc
H.F.
_____
Section
1.
Section
423.1,
subsection
39,
paragraphs
b
and
c,
1
Code
Supplement
2011,
are
amended
to
read
as
follows:
2
b.
The
property
is
transferred
to
the
user
of
the
service
3
in
connection
with
the
performance
of
the
service
in
a
form
4
or
quantity
capable
of
a
fixed
or
definite
price
value
,
or
5
the
property
is
entirely
consumed
in
connection
with
the
6
performance
of
the
service
purchased
by
the
ultimate
user
.
7
c.
The
sale
is
evidenced
by
a
separate
charge
for
the
8
identifiable
piece
of
property
unless
the
property
is
entirely
9
consumed
in
connection
with
the
performance
of
the
service
10
purchased
by
the
ultimate
user
.
11
Sec.
2.
Section
423.3,
Code
Supplement
2011,
is
amended
by
12
adding
the
following
new
subsection:
13
NEW
SUBSECTION
.
96.
The
sales
price
from
the
sale
of
water,
14
electricity,
chemicals,
solvents,
sorbents,
or
reagents
to
a
15
retailer
to
be
used
in
providing
a
service
that
includes
a
16
vehicle
wash
and
wax,
which
vehicle
wash
and
wax
service
is
17
subject
to
section
423.2,
subsection
6.
18
Sec.
3.
EFFECTIVE
UPON
ENACTMENT.
This
Act,
being
deemed
of
19
immediate
importance,
takes
effect
upon
enactment.
20
EXPLANATION
21
This
bill
amends
the
definition
of
“property
purchased
for
22
resale
in
connection
with
the
performance
of
a
service”
in
23
Code
section
423.1.
Under
current
law,
property
qualifies
24
as
“property
purchased
for
resale
in
connection
with
the
25
performance
of
a
service”
if,
among
other
things,
it
is
26
transferred
during
the
service
in
a
form
or
quantity
capable
27
of
a
fixed
or
definite
price
value
and
listed
as
a
separate
28
charge.
The
bill
provides
that
property
which
is
entirely
29
consumed
in
connection
with
the
performance
of
a
service
will
30
also
qualify
as
“property
purchased
for
resale
in
connection
31
with
the
performance
of
a
service”,
and
provides
that
the
32
property
entirely
consumed
in
performance
of
the
service
need
33
not
be
listed
as
a
separate
charge.
34
The
bill
also
creates
a
sales
tax
exemption
for
sales
of
35
-1-
LSB
5512YC
(3)
84
mm/sc
1/
2
H.F.
_____
water,
electricity,
chemicals,
solvents,
sorbents,
or
reagents
1
made
to
a
retailer
for
use
in
providing
taxable
vehicle
wash
2
and
wax
services.
By
operation
of
Code
section
423.6,
an
item
3
exempt
from
the
imposition
of
the
sales
tax
is
also
exempt
from
4
the
use
tax
imposed
in
Code
section
423.5.
5
The
bill
takes
effect
immediately
upon
enactment.
6
-2-
LSB
5512YC
(3)
84
mm/sc
2/
2