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Bills › 90th General Assembly

HF 681Signed by Governor · May 1, 2024

Exempting from the sales and use tax the sales price of tangible personal property or specified digital products sold and services furnished to a county or district fair, and making a county or district fair a designated exempt entity

Sponsored by the House Ways and Means Committee

Topics:Taxes

Same legislation: SF 146, HSB 225

Write your legislators about it

Also covers SF 146 and HSB 225.

What changed before it passed
Official bill pageLobbyist declarationsOne-pager to print

Where it is now

  1. Done: IntroducedJanuary 26, 2023
  2. Done: SubcommitteeMarch 8, 2023
  3. Done: House committeeMarch 21, 2023
  4. Done: Passes the HouseApril 19, 202395–0
  5. Done: Senate committeeApril 18, 2024
  6. Done: Passes the SenateApril 19, 202446–0
  7. Done: To the GovernorApril 29, 2024
  8. Done: Signed into lawMay 1, 2024

Signed into law What’s a funnel?

What’s in it

AI summary County and district fairs will no longer have to pay state sales or use taxes on the items they buy or the services they use. This change applies to physical goods and certain digital products purchased for the fair.1

Read the official explanation

This bill exempts from the state sales and use tax the sales price of tangible personal property or specified digital products sold and services furnished to a county or district fair. Currently, the sales price of tangible personal property or specified digital products sold or services furnished by a county or district fair is exempt from the sales and use tax. 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.

Changed since by amendment S-5193; see Amendments.

Full bill text · What changed before it passed2

Senate subcommittee

Named March 25, 2024. On April 10, 2024 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 This bill exempts county and district fairs from paying state sales and use tax on certain goods and services. It is estimated to reduce revenues for the General Fund, the SAVE Fund, and LOST by $1.0 million, $0.2 million, and $0.2 million respectively for fiscal year 2025 through fiscal year 2029.3

Read the fiscal note

Description

House File 681 exempts from the State sales and use tax the price of tangible personal property, specified digital products, or services sold to a county or district fair. The Bill makes county and district fairs designated exempt entities.

Background

A fair, as defined under Iowa Code chapter 174, means an organization that is incorporated under the laws of this State, including as a county or district fair or as an agricultural society, for the purpose of conducting a fair event, if all of the following apply:

  • The organization owns or leases at least 10 acres of fairgrounds.
  • The organization owns buildings or other improvements situated on the fairgrounds that have been specially constructed for the purposes of conducting a fair event.
  • The market value of the fairgrounds and buildings and other improvements located on the fairgrounds is at least $25,000.

There are 106 county and district fairs in Iowa.

Assumptions

  • The average cost to operate a fair in Iowa is approximately $540,000 annually. One-quarter of this cost, or $135,000, is for items subject to sales/use tax upon purchase. Across all 106 fairs, total annual costs subject to sales/use tax are estimated to be approximately $14.3 million.
  • Construction costs are not included in operating costs.
  • According to the Association of Iowa Fairs 2023 Exhibitor Summary and Statistics Report, there were approximately $8.6 million in capital improvements across Iowa county fairs in 2023. It is assumed that 50.0% of capital improvement costs are labor costs, which are not subject to sales/use tax.
  • Total taxable expenditures by county fairs that will be exempt under the Bill are estimated to be approximately $18.6 million in FY 2023.
  • Growth trends in future fiscal years are based on Consumer Price Index estimated increases of 2.0% from FY 2025 to FY 2029.
  • Secure an Advanced Vision for Education (SAVE) refunds are 1.0% of taxable expenditures. Local options sales tax (LOST) distributions are estimated to be 0.97% of taxable expenditures.

Fiscal Impact

House File 681 is estimated to reduce revenues to the General Fund, SAVE Fund, and LOST by the amounts in Figure 1.

Figure 1 — Fiscal Impact of HF 681 (in Millions)

Sources

  • Iowa Department of Revenue
  • Association of Iowa Fairs 2023 Exhibitor Summary and Statistics Report
  • Legislative Services Agency analysis and calculations

Reading a fiscal note4

Iowa Code it changes

Amends§423.3

How the Code works5

Lobbying

1 for · 0 against · 6 undecided · Who →

Family tree

Study bill

HSB 225Renumbered

90th General Assembly

SF 146Cleared committeeSenate companionHF 681Became lawfrom HSB 225

Tried before

This idea has been filed in an earlier General Assembly. None got through a chamber.

  • HF 2469 Exempting from the state sales and use tax the sales price of tangible personal property o…
    88th General Assembly · In committee · similar
    Cleared committee

Matched by wording or an identical title.