IA
Iowa House Bill HSB226

Iowa 2025-2026 Regular Session

Iowa House Bill HSB226

Introduced
2/20/25  

Caption

A bill for an act making a rural water district a designated exempt entity for purposes of the sales and use tax.(See HF 1033.)

Impact

The introduction of HSB226 is expected to provide significant financial relief to rural water districts by alleviating the burden of sales tax on purchases critical for their service delivery. Previously, rural water districts had some exemptions under existing laws; however, the bill consolidates these into a clearer exemption status. This simplification could lead to increased construction and upgrades in rural water systems, which are essential for maintaining safe and reliable water services in underserved areas.

Summary

House Study Bill 226 (HSB226) proposes to designate rural water districts organized under Iowa Code chapter 504 as exempt entities for sales and use tax purposes. This designation allows these nonprofit entities to apply for refunds of sales and use tax on certain purchases related to building materials and construction services that they utilize in their operations. By amending existing sales tax regulations, the bill aims to simplify the tax exemption process for rural water districts, thereby making it more economically feasible for these entities to invest in the necessary infrastructure improvements for water distribution.

Contention

While the bill aims at streamlining financial processes for rural water districts, there may be concerns regarding the fiscal impact on state revenues, as the exemptions could decrease tax income for the state government. Stakeholders may discuss the balance between encouraging infrastructure development in rural areas and ensuring that the state's budget remains stable. Additionally, the transition from the current tax exemption system to the new designated exempt status could raise questions about implementation and compliance for these districts.

Companion Bills

IA HF1033

Replaced by A bill for an act making a rural water district a designated exempt entity for purposes of the sales and use tax.(Formerly HSB 226.)

Previously Filed As

IA HF91

A bill for an act relating to the state sales and use tax by expanding nonprofit exemptions on the state sales and use tax to include all nonprofit entities exempt from federal taxation.

IA HF681

A bill for an act 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. (Formerly HSB 225.) Effective date: 07/01/2024.

IA HSB247

A bill for an act expanding the sales and use tax exemption allowed for nonprofit blood centers.(See HF 722, HF 2628.)

IA HF722

A bill for an act expanding the sales and use tax exemption allowed for nonprofit blood centers.(Formerly HSB 247; See HF 2628.)

IA HF2628

A bill for an act expanding the sales and use tax exemption allowed for nonprofit blood centers.(Formerly HF 722, HSB 247.)

IA HF676

A bill for an act exempting the sales price of honey bees from the state sales and use tax.(Formerly HF 457; See HF 2627.)

IA HF457

A bill for an act exempting the sales price of honey bees from the state sales and use tax.(See HF 676, HF 2627.)

IA HF2627

A bill for an act exempting the sales price of honey bees from the state sales and use tax.(Formerly HF 676, HF 457.)

IA HSB225

A bill for an act establishing a fair as a designated exempt entity and allowing for refunds of state sales tax in the performance of certain written contracts and including effective date and retroactive applicability provisions.(See HF 681.)

IA SF394

A bill for an act exempting from the state sales and use tax the sales price of lodging supplies sold to a lodging provider.

Similar Bills

No similar bills found.