H.F. 497 Section 1. Section 423G.4, Code 2019, is amended to read as 1 follows: 2 423G.4 Exemptions. 3 1. The sales price from transactions exempt from state sales 4 tax under section 423.3 , except section 423.3, subsection 103 , 5 is also exempt from the tax imposed by this chapter . 6 2. a. For purposes of determining whether a transaction is 7 exempt, the furnishing of water through a piped distribution 8 system by a nonprofit organization to a consumer or user of the 9 water shall not be construed as a sale or furnishing of water 10 and shall be exempt from the tax imposed by this chapter if 11 the price charged for the sale or furnishing of water by the 12 nonprofit organization is not more than the rate charged for 13 consuming or using water from the nearest water utility. 14 b. As used in this subsection, “nonprofit organization” 15 means a nonprofit entity which is exempt from federal income 16 taxation pursuant to section 501(c)(3) of the Internal Revenue 17 Code. 18 EXPLANATION 19 The inclusion of this explanation does not constitute agreement with 20 the explanation’s substance by the members of the general assembly. 21 This bill creates an exemption to the water services excise 22 tax. 23 The bill exempts from the water services excise tax the sale 24 or furnishing of water through a piped distribution system by 25 a nonprofit organization to a consumer or user of the water, 26 if the price charged for the sale or furnishing of water by the 27 nonprofit organization is not more than the rate charged for 28 consuming or using water from the nearest water utility. 29 The bill defines “nonprofit organization”. 30 -1- LSB 2505YH (4) 88 jm/jh 1/ 1