House Study Bill 681 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON KAUFMANN) A BILL FOR An Act relating to the sales tax exemption for the purchase 1 of central office equipment or transmission equipment 2 used by certain entities primarily in the furnishing of 3 telecommunications services on a commercial basis. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5578YC (3) 90 jm/jh

H.F. _____ Section 1. Section 423.3, subsection 47A, paragraph a, Code 1 2024, is amended to read as follows: 2 a. The sales price from the sale of central office equipment 3 or transmission equipment primarily used by local exchange 4 carriers and competitive local exchange service providers; 5 by franchised cable television operators, mutual companies, 6 municipal utilities, cooperatives, and companies furnishing 7 communications services that are not subject to rate regulation 8 as provided in chapter 476 ; by long distance companies as 9 defined in section 477.10 ; or for a commercial mobile radio 10 service as defined in 47 C.F.R. §20.3 in the furnishing of 11 telecommunications services on a commercial basis. 12 EXPLANATION 13 The inclusion of this explanation does not constitute agreement with 14 the explanation’s substance by the members of the general assembly. 15 This bill relates to the sales tax exemption for the purchase 16 of central office equipment or transmission equipment used 17 by certain entities in the furnishing of telecommunications 18 services on a commercial basis. 19 The bill expands the sales tax exemption for the purchase of 20 central office equipment or transmission equipment by striking 21 the term “primarily” and making all such purchases used in the 22 furnishing of telecommunications services exempt from sales 23 tax. 24 Code section 423.3(47A) defines the terms “central office 25 equipment” and “transmission equipment”. 26 By operation of Code section 423.6, an item exempt from the 27 imposition of the sales tax is also exempt from the use tax 28 imposed in Code section 423.5. 29 -1- LSB 5578YC (3) 90 jm/jh 1/ 1