HSB 126 (LSB 1250YC (1) 91)

HOUSE FILE _____ 

BY  (PROPOSED COMMITTEE ON ECONOMIC GROWTH AND TECHNOLOGY BILL BY CHAIRPERSON SORENSEN)

A BILL FOR

An Act relating to the sales tax exemption for the purchase of central office equipment or transmission equipment used by certain entities primarily in the furnishing of telecommunications services on a commercial basis.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 423.3, subsection 47A, paragraph a, Code 2025, is amended to read as follows:
   a.  The sales price from the sale of central office equipment or transmission equipment primarily used by local exchange carriers and competitive local exchange service providers; by franchised cable television operators, mutual companies, municipal utilities, cooperatives, and companies furnishing communications services that are not subject to rate regulation as provided in chapter 476; by long distance companies as defined in section 477.10; or for a commercial mobile radio service as defined in 47 C.F.R. §20.3 in the furnishing of telecommunications services on a commercial basis.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to the sales tax exemption for the purchase of central office equipment or transmission equipment used by certain entities in the furnishing of telecommunications services on a commercial basis.
   The bill expands the sales tax exemption for the purchase of central office equipment or transmission equipment by striking the term “primarily” and making all such purchases used in the furnishing of telecommunications services exempt from sales tax.
   Code section 423.3(47A) defines the terms “central office equipment” and “transmission equipment”.
   By operation of Code section 423.6, an item exempt from the imposition of the sales tax is also exempt from the use tax imposed in Code section 423.5.