Bills › 89th General Assembly
Modifying the sales tax holiday to include emergency preparedness supplies
Sponsored by the Senate Ways and Means Committee
Where it is now
- Done: IntroducedFebruary 24, 2021
- Done: SubcommitteeJanuary 19, 2022
- Done: Senate committeeApril 21, 2021
- Stopped: Passes the SenateDied when the General Assembly ended
- Next: House committee
- Next: Passes the House
- Next: To the Governor
- Next: Signed into law
Died when the session ended The 2022 session adjourned on May 24, 2022, the General Assembly’s last regular session. Bills that didn’t pass both chambers died. What’s a funnel?
What’s in it
AI summary During the annual clothing sales tax holiday in August, people could also buy emergency preparedness supplies without paying sales tax. To qualify for this tax break, most of these basic household emergency items must cost less than $100.1
Read the official explanation
This bill modifies the sales tax holiday. The bill adds the purchase of emergency preparedness supplies to the existing sales tax holiday for clothing during the period beginning at 12:01 a.m. on the first Friday of August and ending at midnight the following Saturday. As with an article of clothing, an emergency preparedness supply item must be under $100 to qualify for the sales tax holiday, except for certain specified items. The bill defines “emergency preparedness supplies” to mean a collection of basic household items needed in the event of an emergency, including a list of some of the items.
Senate subcommittee
Named January 19, 2022. On March 9, 2022 it recommended amendment and passage.
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
AI summary Senate File 604 expands the annual sales tax holiday to include emergency preparedness supplies and removes the $100 price limit on certain items like generators and inverters. This bill is estimated to reduce revenues for the state's General Fund, the Secure an Advanced Vision for Education (SAVE) Fund, and local option sales tax (LOST). For fiscal year 2022, the maximum estimated reductions are $848,500 for the General Fund, $169,700 for the SAVE Fund, and $164,600 for LOST.3
Read the fiscal note
Description
Senate File 604 expands the Iowa sales tax holiday to include emergency preparedness supplies. An exception to the selling price limit of $100 per item is provided for tie down kits, portable generators, transfer switches, and inverters.
Background
The State currently has an annual sales tax holiday held on the first Friday and Saturday of August. During this period, clothing and footwear that meet certain criteria are exempt from sales tax and local option sales tax. The exemption does not apply to any item selling for $100 or more. The Department of Revenue estimates for the amount of sales tax exempted in recent years during the sales tax holiday are listed below:
- FY 2018 = $4.1 million
- FY 2019 = $4.4 million
- FY 2020 = $4.6 million
Alabama, Florida, Texas, and Virginia currently have a sales tax holiday for certain emergency preparedness supplies.
Assumptions
- Current FY 2022 annual sales of emergency preparedness supplies in the State are estimated to be $18.0 million.
- An estimated 5.0% of emergency preparedness supplies will be purchased during the sales tax holiday. Additionally, 5.0% of purchasers will use the sales tax holiday period to purchase higher-priced items than they would purchase without the holiday.
- States with a similar sales tax holiday or similar legislation were reviewed to determine the estimated fiscal impact percentage based on the total sales tax revenue collected by the state. The estimated fiscal impact percentages were in a range from 0.01% to 0.07%, with an average of 0.05%.
- Growth trends in future fiscal years are based on Consumer Price Index Urban (CPI-U) average estimated increases of 2.34% from FY 2022 to FY 2026.
Fiscal Impact
Senate File 604 would reduce revenues to the General Fund, Secure an Advanced Vision for Education (SAVE) Fund, and local option sales tax (LOST) by the estimated ranges listed below.
Sources
- Department of Revenue
- Iowa Emergency Management Association
- Arkansas Department of Finance and Administration
- Florida Finance and Tax Committee
- Texas Comptroller of Public Accounts
- LSA analysis and calculations
- Sales Tax Holiday, Emergency Preparedness Supplies · April 23, 2021
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89th General Assembly
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