Bills › 90th General Assembly
Where it is now
- Done: IntroducedJanuary 26, 2023
- Done: SubcommitteeMarch 8, 2023
- Done: House committeeMarch 21, 2023
- Skipped: Passes the HouseContinued as HF 681
- Next: Senate committee
- Next: Passes the Senate
- Next: To the Governor
- Next: Signed into law
Became HF 681 → Its progress continues under the new number. Go to HF 681 What’s a funnel?
What’s in it
AI summary Counties and district fairs can now apply for refunds on sales and use taxes paid for building materials, supplies, and equipment used for their projects. This change allows these groups to get back money they spent on certain services and items used in written contracts. The total amount of money these groups can get back is limited to $25,000.1
Read the official explanation
Currently, a “designated exempt entity” may apply to the department of revenue, under certain circumstances, for the refund of sales or use tax upon the sales price of all sales of building materials, supplies, equipment, or from services furnished to a contractor, used in the performance of a written contract with the designated exempt entity. This bill also makes a county or district fair a designated exempt entity. This provision takes effect upon enactment and applies retroactively to January 1, 2021. The bill allows for refunds of taxes, interest, or penalties arising from claims resulting from the enactment of the bill. The bill limits the refund amount to $25,000 in the aggregate.
Changed since by amendment S-5193; see Amendments.
House subcommittee
Named March 8, 2023. On March 15, 2023 it recommended amendment and passage. Vote Total: 3-0.
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 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
- Final Fiscal Note — Sales Tax Refunds, County and District Fairs · April 26, 2024
- Sales Tax Refunds, County and District Fairs · April 20, 2024
- Sales Tax Refunds, County and District Fairs · April 1, 2024
- Sales Tax Refunds, County and District Fairs · March 31, 2023
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90th General Assembly
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 · similarCleared committee
Matched by wording or an identical title.