Senate
Study
Bill
1103
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
WAYS
AND
MEANS
BILL
BY
CHAIRPERSON
BOLKCOM)
A
BILL
FOR
An
Act
exempting
from
the
sales
tax
the
sales
price
of
certain
1
items
directly
and
primarily
used
in
the
production
of
2
electricity.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
TLSB
1261XC
(3)
86
mm/sc
S.F.
_____
Section
1.
Section
423.3,
subsection
47,
paragraph
a,
Code
1
2015,
is
amended
by
adding
the
following
new
subparagraph:
2
NEW
SUBPARAGRAPH
.
(7)
Directly
and
primarily
used
to
3
produce
electricity
to
be
offered
for
sale,
which
electricity
4
is
produced
at
a
facility
with
a
generating
capacity
greater
5
than
five
hundred
megawatts
by
a
person
that
is
not
a
public
6
utility
as
defined
under
section
476.1,
subsection
3.
7
Sec.
2.
Section
423.3,
subsection
47,
paragraph
c,
8
subparagraph
(3),
Code
2015,
is
amended
to
read
as
follows:
9
(3)
Industrial
machinery,
equipment,
and
computers,
10
including
pollution-control
equipment
within
the
scope
of
11
section
427A.1,
subsection
1
,
paragraphs
“h”
and
“i”
.
This
12
subparagraph
(3)
shall
not
apply
to
paragraph
“a”
,
subparagraph
13
(7),
of
this
subsection.
14
EXPLANATION
15
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
16
the
explanation’s
substance
by
the
members
of
the
general
assembly.
17
This
bill
relates
to
the
sales
tax
exemption
in
Code
section
18
423.3(47)
for
the
purchase
or
rental
of
computers,
machinery,
19
equipment,
replacement
parts,
and
materials
used
to
construct
20
such
items
(collectively
“specified
items”)
that
are
used
in
21
certain
activities.
The
bill
provides
that
the
specified
22
items
will
be
exempt
from
the
sales
tax
if
they
are
directly
23
and
primarily
used
to
produce
electricity
to
be
offered
for
24
sale,
provided
the
electricity
is
produced
at
a
facility
with
25
a
generating
capacity
greater
than
500
megawatts
by
a
person
26
that
is
not
a
public
utility,
as
defined
under
Code
section
27
476.1(3).
Code
section
476.1(3)
generally
defines
a
public
28
utility
as
a
person
that
is
furnishing
gas
or
water
by
pipe
29
distribution
system,
electricity,
or
communication
services
to
30
the
public
for
compensation.
31
Under
current
law,
the
sales
tax
exemption
in
Code
section
32
423.3(47)
does
not
apply
to
industrial
machinery,
equipment,
33
computers,
and
pollution-control
equipment
listed
in
Code
34
section
427A.1(1)(h)
and
(i)
(property
assessed
as
real
35
-1-
LSB
1261XC
(3)
86
mm/sc
1/
2
S.F.
_____
property).
The
bill
makes
a
conforming
amendment
to
provide
1
that
this
exclusion
from
the
sales
tax
exemption
does
not
2
apply
to
the
specified
items
used
to
produce
electricity
to
be
3
offered
for
sale.
4
By
operation
of
Code
section
423.6,
an
item
exempt
from
the
5
imposition
of
the
sales
tax
is
also
exempt
from
the
use
tax
6
imposed
in
Code
section
423.5.
7
-2-
LSB
1261XC
(3)
86
mm/sc
2/
2