Bill Text: IA HF2478 | 2017-2018 | 87th General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: A bill for an act amending the sales tax imposed on certain machinery, equipment, attachments, and replacement parts used in construction. (Formerly HSB 673.) Effective 7-1-18.

Spectrum: Committee Bill

Status: (Passed) 2018-05-16 - Signed by Governor. H.J. 997. [HF2478 Detail]

Download: Iowa-2017-HF2478-Introduced.html

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House File 2478 - Introduced




                                 HOUSE FILE       
                                 BY  COMMITTEE ON WAYS AND
                                     MEANS

                                 (SUCCESSOR TO HSB 673)

                                      A BILL FOR

  1 An Act amending the sales tax imposed on certain machinery,
  2    equipment, attachments, and replacement parts used in
  3    construction.
  4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
    TLSB 6178HV (2) 87
    mm/jh

PAG LIN



  1  1    Section 1.  Section 423.3, subsection 2, Code 2018, is
  1  2 amended to read as follows:
  1  3    2.  The sales price of sales for resale of tangible personal
  1  4 property or taxable services, or for resale of tangible
  1  5 personal property in connection with the furnishing of taxable
  1  6 services except for sales, other than leases or rentals, which
  1  7 are sales of machinery, equipment, attachments, and replacement
  1  8 parts specifically enumerated in subsection 37 and used in the
  1  9 manner described in subsection 37 or the purchase of tangible
  1 10 personal property, the leasing or rental of which is exempted
  1 11 from tax by subsection 49.
  1 12                           EXPLANATION
  1 13 The inclusion of this explanation does not constitute agreement with
  1 14 the explanation's substance by the members of the general assembly.
  1 15    This bill relates to the sales tax imposed on certain
  1 16 construction equipment.
  1 17    CURRENT LAW.  Under current law in Code section 423.3(37),
  1 18 the lease or rental of machinery, equipment, attachments, and
  1 19 replacement parts directly and primarily used in specified
  1 20 construction services by an owner, contractor, subcontractor,
  1 21 or builder is exempt from the sales tax (construction
  1 22 equipment exemption).  Also under current law, in Code section
  1 23 423.3(2), the purchase of tangible personal property for
  1 24 subsequent resale, lease, or rental is exempt from the sales
  1 25 tax (sale=for=resale exemption).  However, the purchase of
  1 26 construction equipment for a subsequent lease or rental that
  1 27 will qualify for the construction equipment exemption does not
  1 28 qualify for the sale=for=resale exemption.
  1 29    BILL CHANGES.  The bill strikes language excluding from
  1 30 the sale=for=resale exemption the purchase of construction
  1 31 equipment for a subsequent lease or rental that will qualify
  1 32 for the construction equipment exemption.
  1 33    By operation of Code section 423.6, an item exempt from the
  1 34 imposition of the sales tax is also exempt from the use tax
  1 35 imposed in Code section 423.5.
       LSB 6178HV (2) 87
       mm/jh