Iowa Senate Bill SSB3186

Iowa 2023-2024 Regular Session

• Introduced: 3/11/24
• Refer: 3/11/24

Caption

A bill for an act establishing an excise tax on the sales price of consumable hemp products sold or purchased.(See SF 2417.)

Impact

The implementation of SSB3186 is expected to significantly impact state legislation regarding the sales and taxation of hemp-derived products. By instituting an excise tax specifically for consumable hemp products, the state seeks to establish a coherent regulatory framework for the growing sector while generating revenue. This move aligns Iowa’s tax structure with its evolving agricultural policy, reflecting a broader acceptance and integration of hemp products within the economy. As such, the bill is poised to help standardize practices surrounding the retail of hemp products, ensuring that both compliance and revenue collection are more streamlined.

Summary

Senate Study Bill 3186 is designed to establish a 25% excise tax on the sales price of consumable hemp products sold or purchased within the state of Iowa. The bill amends existing tax codes to specifically define consumable hemp products and outlines that this excise tax will be administered similarly to state sales and use tax laws. Funds generated from this tax will be directed into the general fund of the state, thus aiming to bolster state revenue while regulating this emerging market. It is further noted that sales of consumable hemp products subject to this excise tax will be exempt from the traditional sales tax, providing clarity for retailers and consumers alike.

Contention

While SSB3186 appears to provide a systematic approach to taxing consumable hemp products, it may also generate debate among legislators and stakeholders. Some proponents view the excise tax as a necessary step to regulate a previously unregulated market, which in return boosts state coffers. However, detractors may argue that the 25% tax rate could disproportionately affect consumers and small businesses, potentially stymying growth in the hemp industry. Moreover, discussions might arise surrounding the implications for local businesses, especially those reliant on hemp products, and how this tax aligns with broader agricultural practices in Iowa.