House Study Bill 667 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON SANDS) A BILL FOR An Act providing for sales and use taxes collected on farm 1 machinery and equipment. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5629YC (2) 84 da/sc

H.F. _____ Section 1. Section 423.3, subsection 8, paragraph a, 1 subparagraph (1), Code Supplement 2011, is amended to read as 2 follows: 3 (1) The farm machinery and equipment shall be directly and 4 primarily used in production of agricultural products. 5 Sec. 2. ADOPTION OF RULES. The department of revenue shall 6 adopt rules as necessary in order to administer this Act. In 7 drafting its proposed rules as part of its notice of intended 8 action as required in section 17A.4, the department shall 9 consult organizations representing persons involved in the sale 10 of farm machinery and equipment. 11 EXPLANATION 12 This bill provides for an exemption from sales and use taxes 13 imposed on machinery and equipment sold for farm use (Code 14 sections 423.3 and 423.6). The bill retains the requirement 15 that the exemption applies to machinery and equipment primarily 16 used in agricultural production, but eliminates the requirement 17 that it also must be directly used for such production. The 18 bill also provides that when the department of revenue drafts 19 its proposed rules to administer the exemption revised in the 20 bill, it must consult with organizations representing retailers 21 who sell farm machinery and equipment. 22 -1- LSB 5629YC (2) 84 da/sc 1/ 1