Senate File 109 - IntroducedA Bill ForAn Act 1modifying the sales and use tax exemption for the sale
2of certain component parts attached to or services performed
3on aircraft.
1   Section 1.  Section 423.3, subsections 74 and 76, Code 2021,
2are amended to read as follows:
   374.  The sales price from the sale or rental of aircraft for
4use in a scheduled interstate federal aviation administration
5certificated air carrier operation.
   676.  The sales price from the sale or rental of tangible
7personal property permanently affixed or attached as a
8component part of the aircraft, including but not limited
9to repair or replacement materials or parts; and the sales
10price of all services used for aircraft repair, remodeling,
11and maintenance services when such services are performed on
12aircraft, aircraft engines, or aircraft component materials or
13parts. For the purposes of this exemption, “aircraft” means
14aircraft used in nonscheduled interstate federal aviation
15administration certificated air carrier operation operating
16under 14 C.F.R. ch.1, pt.135
 the same as defined in section
18   Sec. 2.  Section 423.3, subsection 75, Code 2021, is amended
19by striking the subsection.
21The inclusion of this explanation does not constitute agreement with
22the explanation’s substance by the members of the general assembly.
   23Current law exempts from the Iowa sales and use tax the
24sale, rental, or use of aircraft component parts permanently
25attached to an aircraft, including repair or replacement
26materials or parts, and repair, remodeling, and maintenance
27services used on an aircraft, aircraft engine, or aircraft
28component materials or parts, provided the aircraft is used
29in either a scheduled or nonscheduled interstate federal
30aviation administration (FAA) certified air carrier operation
31(scheduled or nonscheduled FAA operation). This bill removes
32the requirement that the aircraft be used in a scheduled or
33nonscheduled FAA operation to qualify for the exemption. The
34sale, rental, or use of the component parts and services
35described above will be exempt from the sales and use tax
-1-1when permanently attached to or performed on any aircraft.
2The bill defines “aircraft” to mean the same as it does for
3purposes of Code chapter 328 (aeronautics), which includes any
4contrivance now known, or hereafter invented, used or designed
5for navigation of or flight in the air, for the purpose of
6transporting persons or property, or both.
   7The bill also makes nonsubstantive changes to Code sections
8423.3(74) and 423.3(75) to strike or move similar language
9relating to the sales and use tax exemption described in the
10bill and to the sales and use tax exemption for the sale or
11rental of aircraft used in a scheduled FAA operation.