Exempting from the state sales tax the purchase price of tangible personal property or specified digital products sold and services furnished to a nonprofit food bank

Same legislation: SF 205, HF 370

Official bill page Lobbyist declarations One-pager to print

Where it is now

Done: IntroducedFebruary 6, 2019
Done: SubcommitteeFebruary 13, 2019
Stopped: House committeeDied when the General Assembly ended
Next: Passes the House
Next: Senate committee
Next: Passes the Senate
Next: To the Governor
Next: Signed into law

Died when the session ended The 2020 session adjourned on June 14, 2020, the General Assembly’s last regular session. Bills that didn’t pass both chambers died. What’s a funnel?

What’s in it

This bill exempts from the sales tax the purchase price from the sale or rental of tangible personal property or specified digital products, or services furnished, to a nonprofit food bank if the property or services are to be used by the nonprofit food bank for a charitable purpose. “Nonprofit food bank” is defined in the bill. 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.

Full bill text¹

House subcommittee

Named January 29, 2020. It hasn’t reported yet.

Three legislators hear a bill first and recommend what the committee should do; it’s the best time to weigh in. How to take part

Fiscal note

Savings: up to $33,000 Compare with other bills

AI summary This bill exempts nonprofit food banks from paying sales and use tax on certain purchases and services used for charitable purposes. It is estimated to reduce General Fund, Secure an Advanced Vision for Education (SAVE) Fund, and local option sales tax (LOST) revenues by $143,000, $29,000, and $29,000 in fiscal year 2021. These reductions are projected to increase annually through fiscal year 2025.²

Read the fiscal note

Description

House File 2103 exempts from the sales tax and use tax the purchase price from the sale or rental of tangible personal property or specified digital products, or services furnished, to a nonprofit food bank if the property or services are to be used by the nonprofit food bank for a charitable purpose.

Assumptions

There are currently six major food banks that serve Iowa. Of those six, one is based in Omaha (Food Bank for the Heartland) and is assumed to not make significant purchases subject to Iowa sales/use tax. Another (Hawkeye Area Community Action Program) already qualifies for a sales/use tax exemption as a community action agency under Iowa Code section 423.3(79).
The IRS 990 reports of the four remaining food banks were analyzed to identify a baseline amount of taxable purchases.
An estimated 60 additional smaller food banks and food pantries will qualify under the Bill. These entities are estimated to represent 5.0% of total purchases of all qualifying entries.
Growth trends in future fiscal years are based on Revenue Estimating Conference projections and 2.0% in subsequent years.

Fiscal Impact

House File 2103 will reduce General Fund, Secure an Advanced Vision for Education (SAVE) Fund, and local option sales tax (LOST) revenues by the following amounts.General Fund SAVE LOST FY 2021 143,000$ 29,000$ 29,000$ FY 2022 146,000$ 30,000$ 30,000$ FY 2023 149,000$ 31,000$ 31,000$ FY 2024 152,000$ 32,000$ 32,000$ FY 2025 155,000$ 33,000$ 33,000$

Sources

Department of Revenue
IRS 990 reports for Food Bank of Iowa, River Bend Foodbank, Northeast Iowa Food Bank, and
Food Bank of Siouxland (2014-2017)
Interviews with the Iowa Food Bank Association and Food Bank of Iowa
LSA analysis and calculations

Food Bank Sales Tax Exemption · March 9, 2020 · $33,000

Reading a fiscal note³

Iowa Code it changes

Amends§423.3

How the Code works⁴

Lobbying

14 for · 0 against · 5 undecided · Who →

Family tree

88th General Assembly

SF 205Cleared committeeSenate companion HF 370Cleared committeeHouse companion HF 2103Cleared committeeHouse companion

Picked up later

HF 579Cleared committee89th GA SF 306Cleared committee89th GA SF 601Cleared committee89th GA

Earlier and later bills are matched by wording or an identical title.

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