Relating to sales tax rebates for a raceway facility and making tax provision corrections

Description

House File 660 extends the date that sales tax receipts collected on sales of tangible personal property or services furnished by retailers at an eligible raceway facility can be rebated to an eligible raceway facility from June 30, 2025, to June 30, 2030.

The Bill also makes a technical correction to 2023 Iowa Acts, House File 718 (Property Tax, Assessments, and Bond Elections Act), to add the word “percent” to specific county levy rate calculations.

Background

The sales and use tax rebate for eligible raceway facilities was created in 2014 Iowa Acts, chapter 1102 (Sales and Use Tax Rebate — Raceway Facility Act). Under current law, the sales tax receipts collected on sales of tangible personal property or services furnished by retailers at an eligible raceway facility are rebated to the raceway facility until June 30, 2025, or until the total rebate amount equals $1.8 million, whichever is earliest.

Assumptions

• Information on the actual amount of rebate claims paid since inception of the racetrack rebate is not available.
• It is assumed that through FY 2023, approximately $1.0 million was claimed in sales tax rebates.
• It is estimated that $225,000 in rebates will be claimed between FY 2024 and FY 2025.
• Based on the first three assumptions, rebate claims through FY 2025 will be $575,000 below the $1.8 million limit when rebate availability ends under current law.
• With the program end date extended through FY 2030 as proposed in the Bill, it is assumed that the $1.8 million rebate cap will be met by FY 2030.

Fiscal Impact

It is estimated that HF 660 will decrease revenue to the General Fund by approximately $575,000 between FY 2026 and FY 2030 before the $1.8 million cap is reached.

Sources

• Department of Revenue
• LSA calculations