A bill for an act relating to the distribution of water exempt from taxation and the use of tax exemption certificates, and providing civil penalties.

House

File

329

-

Introduced

HOUSE

FILE

329

BY

SEXTON

(COMPANION

TO

SF

200

BY

SINCLAIR)

A

BILL

FOR

An

Act

relating

to

the

distribution

of

water

exempt

from

1

taxation

and

the

use

of

tax

exemption

certificates,

and

2

providing

civil

penalties.

3

BE

IT

ENACTED

BY

THE

GENERAL

ASSEMBLY

OF

THE

STATE

OF

IOWA:

4

TLSB

2135YH

(2)

91

jm/jh

H.F.

329

Section

1.

NEW

SECTION

.

421.72

Valid

exemption

certificate

1

——

penalty.

2

1.

As

used

in

this

section:

3

a.

“Exemption

certificate”

means

a

valid

certificate

whether

4

furnished

by

the

department

of

revenue

or

the

person

using

the

5

water

that

exempts

all

or

a

portion

of

the

person’s

use

of

6

water

from

the

tax

imposed

pursuant

to

chapter

423

or

423G.

7

b.

“Water

utility”

means

a

public

utility

as

defined

in

8

section

476.1,

subsection

2,

paragraph

“c”

.

9

2.

A

water

utility

shall

accept

and

retain

a

valid

exemption

10

certificate

and

shall

not

unnecessarily

require

a

person

who

11

presents

a

valid

exemption

certificate

to

obtain

a

sales

or

12

water

service

tax

refund

from

the

department

of

revenue

rather

13

than

receiving

the

exemption.

14

3.

a.

A

water

utility

that

does

not

accept

a

valid

15

exemption

certificate

shall

pay

a

civil

penalty

to

the

16

department

of

revenue

equal

to

the

amount

of

tax

refunded

to

17

the

person

who

possessed

a

valid

exemption

certificate

plus

18

interest

at

the

rate

in

effect

under

section

421.7.

19

b.

The

department

of

revenue

shall

deposit

any

penalties

and

20

interest

collected

pursuant

to

this

section

into

the

general

21

fund

of

the

state.

22

4.

The

department

of

revenue

shall

adopt

rules

to

administer

23

this

section.

24

EXPLANATION

25

The

inclusion

of

this

explanation

does

not

constitute

agreement

with

26

the

explanation’s

substance

by

the

members

of

the

general

assembly.

27

This

bill

relates

to

the

distribution

of

water

exempt

from

28

taxation.

29

The

bill

requires

a

water

utility

to

accept

and

retain

a

30

valid

exemption

certificate

and

shall

not

unnecessarily

require

31

a

person

who

presents

a

valid

exemption

certificate

to

obtain

32

a

sales

or

water

service

tax

refund

from

the

department

of

33

revenue

rather

than

receiving

the

exemption.

34

A

water

utility

that

does

not

accept

a

valid

exemption

35

-1-

LSB

2135YH

(2)

91

jm/jh

1/

2

H.F.

329

certificate

shall

pay

a

civil

penalty

to

the

department

of

1

revenue

equal

to

the

amount

of

tax

refunded

to

the

person

who

2

possessed

a

valid

exemption

certificate

plus

interest.

3

The

bill

defines

“exemption

certificate”

and

“water

4

utility”.

5

The

department

of

revenue

is

required

to

adopt

rules

to

6

administer

the

bill.

7

-2-

LSB

2135YH

(2)

91

jm/jh

2/

2