Exempting sales and use taxes incurred for constructing a regional water trail system by a nonprofit corporation, and including effective date and retroactive applicability provisions

This bill exempts sales and use taxes incurred by a nonprofit corporation for the construction of a regional water trail system. The bill makes a nonprofit corporation (nonprofit) organized under Code chapter 504 a designated exempt entity, which allows the nonprofit corporation to apply to the department of revenue for the refund of the sales and use tax upon sales of building materials, supplies, and equipment, or from services furnished, by a contractor in the performance of a written contract with the nonprofit. The nonprofit is generally defined to mean an Iowa nonprofit corporation that has a majority of voting board members appointed by political subdivisions of the state, that implements a regional recreational and dam safety plan, and constructs a regional water trail system. The bill also exempts from the sales tax the sales price of tangible personal property or specified digital products sold or of services furnished to the nonprofit.3(80).3(80)(c)(1) to specify written contracts with an exempt entity for the sales tax exemption even if another designated exempt entity ultimately owns the property subject to the construction project.5. The bill takes effect upon enactment and applies retroactively to January 1, 2025, to all tangible personal property or specified digital products sold, or services furnished, to the designated exempt entity occurring on or after that date. The bill also applies retroactively to January 1, 2025, to building materials, supplies, equipment, or services furnished to a contractor and used in the performance of a written contract with the designated exempt entity occurring on or after that date.