Bills › 90th General Assembly
Exempting from the state sales and use tax the sales price of lodging supplies sold to a lodging provider
Topics:Business & economyTaxes
Same legislation: SF 394
Where it is now
- Done: IntroducedFebruary 23, 2023
- Done: SubcommitteeMarch 8, 2023
- 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 2024 session adjourned on April 19, 2024, 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 People who run hotels or other places to stay would not have to pay state sales or use tax on certain supplies. These tax breaks only apply to items that the lodging provider uses for their guests.1
Read the official explanation
This bill exempts from the state sales and use tax the sales price of lodging supplies sold to a lodging provider. Under the bill, such lodging supplies are exempt if the lodging supplies are consumed or used by the customer of the lodging provider. The bill defines customer, lodging provider, and lodging supplies. 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.
House subcommittee
Named March 8, 2023. On March 14, 2023 it recommended amendment and passage. Vote Total: 2-0.
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 394 exempts certain lodging supplies, such as toiletries, towels, and utilities, from sales and use tax when they are used by customers. This bill is estimated to reduce revenues for the state's General Fund, the Secure an Advanced Vision for Education (SAVE) Fund, and the local option sales tax (LOST). The estimated reductions to the General Fund are $6.0 million in fiscal year 2024, $6.1 million in fiscal year 2025, $6.2 million in fiscal year 2026, $6.4 million in fiscal year 2027, and $6.5 million in fiscal year 2028.3
Read the fiscal note
Description
Senate File 394 exempts lodging supplies sold to a lodging provider from sales and use tax if the lodging supplies are consumed or used by customers.
The definition of “lodging supplies” includes toilet tissue, facial tissue, shampoo, conditioner, complimentary toiletries, running water, electrical service provided to a guest room, bottled water, towels, sheets, blankets, pillows, wrapped glasses, coffee cups, Internet service, television service, pens, paper, phone service, and cleaning supplies.
Background
According to the Iowa Hotel and Lodging Association website, there are 714 hotel properties in the State with more than 51,000 guest rooms.
According to the Energy Star Hotels: An Overview of Energy Use and Energy Efficiency Opportunities report, hotels spend approximately $2,000 per available room each year on energy costs.
Assumptions
- The Bill is effective July 1, 2023 (FY 2024).
- Based on Department of Revenue research, lodging supplies as defined in the Bill comprise approximately 10.0% of sales reported on tax returns by hotels and motels.
- Growth trends in future fiscal years are based on the Consumer Price Index (CPI-U) less food and energy average estimated increases of 2.0% from FY 2024 to FY 2028.
Fiscal Impact
Senate File 394 would reduce revenues to the General Fund, Secure an Advanced Vision for Education (SAVE) Fund, and local option sales tax (LOST) by the estimated amounts listed below.
Table 1 — Fiscal Impact of SF 394 (in millions)General Fund SAVE LOST 2024 -6.0$ -1.2$ -1.2$ 2025 -6.1 -1.2 -1.2 2026 -6.2 -1.2 -1.2 2027 -6.4 -1.3 -1.2 2028 -6.5 -1.3 -1.3
Source
- Department of Revenue
- Sales Tax Exemption, Goods Purchased by Hotels · April 13, 2023
- Sales Tax Exemption, Goods Purchased by Hotels · April 13, 2023
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90th General Assembly
Picked up later
Earlier and later bills are matched by wording or an identical title.
Similar bills
- HF 419 Exempting from the state sales and use tax the sales price of lodging supplies sold to a l…91st General Assembly · Subcommittee recommends passageNearly identical
Matched by wording or an identical title.