423.3 EXEMPTIONS.
There is exempted from the provisions of this subchapter and from
the computation of the amount of tax imposed by it the following:
1. The sales price from sales of tangible personal property and
services furnished which this state is prohibited from taxing under
the Constitution or laws of the United States or under the
Constitution of this state.
2. The sales price of sales for resale of tangible personal
property or taxable services, or for resale of tangible personal
property in connection with the furnishing of taxable services except
for sales, other than leases or rentals, which are sales of
machinery, equipment, attachments, and replacement parts specifically
enumerated in subsection 37 and used in the manner described in
subsection 37 or the purchase of tangible personal property, the
leasing or rental of which is exempted from tax by subsection 49.
3. The sales price of agricultural breeding livestock and
domesticated fowl.
4. The sales price of commercial fertilizer.
5. a. The sales price of agricultural limestone, herbicide,
pesticide, insecticide, including adjuvants, surfactants, and other
products directly related to the application enhancement of those
products, food, medication, or agricultural drain tile, including
installation of agricultural drain tile, any of which are to be used
in disease control, weed control, insect control, or health promotion
of plants or livestock produced as part of agricultural production
for market.
b. The following enumerated materials associated with the
installation of agricultural drain tile which is exempt pursuant to
paragraph "a" shall also be exempt under paragraph "a":
(1) Tile intakes.
(2) Outlet pipes and guards.
(3) Aluminum and gabion structures.
(4) Erosion control fabric.
(5) Water control structures.
(6) Miscellaneous tile fittings.
6. The sales price of tangible personal property which will be
consumed as fuel in creating heat, power, or steam for grain drying,
or for providing heat or cooling for livestock buildings or for
greenhouses or buildings or parts of buildings dedicated to the
production of flowering, ornamental, or vegetable plants intended for
sale in the ordinary course of business, or for use in cultivation of
agricultural products by aquaculture, or in implements of husbandry
engaged in agricultural production.
7. The sales price of services furnished by specialized flying
implements of husbandry used for agricultural aerial spraying.
8. The sales price exclusive of services of farm machinery and
equipment, including auxiliary attachments which improve the
performance, safety, operation, or efficiency of the machinery and
equipment and replacement parts, if the following conditions are met:
a. The farm machinery and equipment shall be directly and
primarily used in production of agricultural products.
b. The farm machinery and equipment shall constitute
self-propelled implements or implements customarily drawn or attached
to self-propelled implements or the farm machinery or equipment is a
grain dryer.
c. The replacement part is used in any repair or
reconstruction necessary to the farm machinery's or equipment's
exempt use in the production of agricultural products.
Vehicles subject to registration, as defined in section 423.1, or
replacement parts for such vehicles, are not eligible for this
exemption.
9. The sales price of wood chips, sawdust, hay, straw, paper, or
other materials used for bedding in the production of agricultural
livestock or fowl.
10. The sales price of gas, electricity, water, or heat to be
used in implements of husbandry engaged in agricultural production.
11. The sales price exclusive of services of farm machinery and
equipment, including auxiliary attachments which improve the
performance, safety, operation, or efficiency of the machinery and
equipment, and including auger systems, curtains and curtain systems,
drip systems, fan and fan systems, shutters, inlets and shutter or
inlet systems, and refrigerators, and replacement parts, if all of
the following conditions are met:
a. The implement, machinery, or equipment is directly and
primarily used in livestock or dairy production, aquaculture
production, or the production of flowering, ornamental, or vegetable
plants.
b. The implement is not a self-propelled implement or
implement customarily drawn or attached to self-propelled implements.
c. The replacement part is used in any repair or
reconstruction necessary to the farm machinery's or equipment's
exempt use in livestock or dairy production, aquaculture production,
or the production of flowering, ornamental, or vegetable plants.
12. The sales price, exclusive of services, from sales of
irrigation equipment used in farming operations.
13. The sales price from the sale or rental of irrigation
equipment, whether installed above or below ground, to a contractor
or farmer if the equipment will be primarily used in agricultural
operations.
14. The sales price from the sales of horses, commonly known as
draft horses, when purchased for use and so used as draft horses.
15. The sales price from the sale of property which is a
container, label, carton, pallet, packing case, wrapping, baling
wire, twine, bag, bottle, shipping case, or other similar article or
receptacle sold for use in agricultural, livestock, or dairy
production.
16. The sales price from the sale of feed and feed supplements
and additives when used for consumption by farm deer or bison.
17. The sales price of all goods, wares, or merchandise, or
services, used for educational purposes sold to any private nonprofit
educational institution in this state. For the purpose of this
subsection, "educational institution" means an institution which
primarily functions as a school, college, or university with
students, faculty, and an established curriculum. The faculty of an
educational institution must be associated with the institution and
the curriculum must include basic courses which are offered every
year. "Educational institution" includes an institution
primarily functioning as a library.
18. The sales price of tangible personal property sold, or of
services furnished, to the following nonprofit corporations:
a. Residential care facilities and intermediate care
facilities for persons with mental retardation and residential care
facilities for persons with mental illness licensed by the department
of inspections and appeals under chapter 135C.
b. Residential facilities licensed by the department of human
services pursuant to chapter 237, other than those maintained by
individuals as defined in section 237.1, subsection 7.
c. Rehabilitation facilities that provide accredited
rehabilitation services to persons with disabilities which are
accredited by the commission on accreditation of rehabilitation
facilities or the accreditation council for services for persons with
mental retardation and other persons with developmental disabilities
and adult day care services approved for reimbursement by the state
department of human services.
d. Community mental health centers accredited by the
department of human services pursuant to chapter 225C.
e. Community health centers as defined in 42 U.S.C. § 254(c)
and migrant health centers as defined in 42 U.S.C. § 254(b).
f. Home and community-based services providers certified to
offer Medicaid waiver services by the department of human services
that are any of the following:
(1) Ill and handicapped waiver service providers, described in
441 IAC 77.30.
(2) Hospice providers, described in 441 IAC 77.32.
(3) Elderly waiver service providers, described in 441 IAC 77.33.
(4) AIDS/HIV waiver service providers, described in 441 IAC
77.34.
(5) Federally qualified health centers, described in 441 IAC
77.35.
(6) MR waiver service providers, described in 441 IAC 77.37.
(7) Brain injury waiver service providers, described in 441 IAC
77.39.
19. The sales price of tangible personal property sold to a
nonprofit organization which was organized for the purpose of lending
the tangible personal property to the general public for use by them
for nonprofit purposes.
20. The sales price of tangible personal property sold, or of
services furnished, to nonprofit legal aid organizations.
21. The sales price of goods, wares, or merchandise, or of
services, used for educational, scientific, historic preservation, or
aesthetic purpose sold to a nonprofit private museum.
22. The sales price from sales of goods, wares, or merchandise,
or from services furnished, to a nonprofit private art center to be
used in the operation of the art center.
23. The sales price of tangible personal property sold, or of
services furnished, by a fair organized under chapter 174.
24. The sales price from services furnished by the notification
center established pursuant to section 480.3, and the vendor selected
pursuant to section 480.3 to provide the notification service.
25. The sales price of food and beverages sold for human
consumption by a nonprofit organization which principally promotes a
food or beverage product for human consumption produced, grown, or
raised in this state and whose income is exempt from federal taxation
under section 501(c) of the Internal Revenue Code.
26. The sales price of tangible personal property sold, or of
services furnished, to a statewide nonprofit organ procurement
organization, as defined in section 142C.2.
27. The sales price of tangible personal property sold, or of
services furnished, to a nonprofit hospital licensed pursuant to
chapter 135B to be used in the operation of the hospital.
28. The sales price of tangible personal property sold, or of
services furnished, to a freestanding nonprofit hospice facility
which operates a hospice program as defined in 42 C.F.R., ch. IV, §
418.3, which property or services are to be used in the hospice
program.
29. The sales price of all goods, wares, or merchandise sold, or
of services furnished, which are used in the fulfillment of a written
construction contract with a nonprofit hospital licensed pursuant to
chapter 135B if all of the following apply:
a. The sales and delivery of the goods, wares, or
merchandise, or the services furnished occurred between July 1, 1998,
and December 31, 2001.
b. The written construction contract was entered into prior
to December 31, 1999, or bonds to fund the construction were issued
prior to December 31, 1999.
c. The sales or services were purchased by a contractor as
the agent for the hospital or were purchased directly by the
hospital.
30. The sales price of livestock ear tags sold by a nonprofit
organization whose income is exempt from federal taxation under
section 501(c)(6) of the Internal Revenue Code where the proceeds are
used in bovine research programs selected or approved by such
organization.
31. The sales price of goods, wares, or merchandise sold to and
of services furnished, and used for public purposes sold to a
tax-certifying or tax-levying body of the state or a governmental
subdivision of the state, including regional transit systems, as
defined in section 324A.1, the state board of regents, department of
human services, state department of transportation, any municipally
owned solid waste facility which sells all or part of its processed
waste as fuel to a municipally owned public utility, and all
divisions, boards, commissions, agencies, or instrumentalities of
state, federal, county, or municipal government which have no
earnings going to the benefit of an equity investor or stockholder,
except any of the following:
a. The sales price of goods, wares, or merchandise sold to,
or of services furnished, and used by or in connection with the
operation of any municipally owned public utility engaged in selling
gas, electricity, heat, pay television service, or communication
service to the general public.
b. The sales price of furnishing of sewage services to a
county or municipality on behalf of nonresidential commercial
operations.
c. The furnishing of solid waste collection and disposal
service to a county or municipality on behalf of nonresidential
commercial operations located within the county or municipality.
The exemption provided by this subsection shall also apply to all
such sales of goods, wares, or merchandise or of services furnished
and subject to use tax.
32. The sales price of tangible personal property sold, or of
services furnished, by a county or city. This exemption does not
apply to any of the following:
a. The tax specifically imposed under section 423.2 on the
sales price from sales or furnishing of gas, electricity, water,
heat, pay television service, or communication service to the public
by a municipal corporation in its proprietary capacity.
b. The sale or furnishing of solid waste collection and
disposal service to nonresidential commercial operations.
c. The sale or furnishing of sewage service for
nonresidential commercial operations.
d. Fees paid to cities and counties for the privilege of
participating in any athletic sports.
33. a. The sales price of mementos and other items relating
to Iowa history and historic sites, the general assembly, and the
state capitol, sold by the legislative services agency and its
legislative information office on the premises of property under the
control of the legislative council, at the state capitol, and on
other state property.
b. The legislative services agency is not a retailer under
this chapter and the sale of items or provision of services by the
legislative services agency is not a retail sale under this chapter
and is exempt from the sales tax.
34. The sales price from sales of mementos and other items
relating to Iowa history and historic sites by the department of
cultural affairs on the premises of property under its control and at
the state capitol.
35. The sales price from sales or services furnished by the state
fair organized under chapter 173.
36. The sales price from sales of tangible personal property or
of the sale or furnishing of electrical energy, natural or artificial
gas, or communication service to another state or political
subdivision of another state if the other state provides a similar
reciprocal exemption for this state and political subdivision of this
state.
37. The sales price of services on or connected with new
construction, reconstruction, alteration, expansion, remodeling, or
the services of a general building contractor, architect, or
engineer. The exemption in this subsection also applies to the sales
price on the lease or rental of all machinery, equipment, and
replacement parts directly and primarily used by owners, contractors,
subcontractors, and builders for new construction, reconstruction,
alteration, expansion, or remodeling of real property or structures
and of all machinery, equipment, and replacement parts which improve
the performance, safety, operation, or efficiency of the machinery,
equipment, and replacement parts so used.
38. The sales price from the sale of building materials,
supplies, or equipment sold to rural water districts organized under
chapter 504 as provided in chapter 357A and used for the construction
of facilities of a rural water district.
39. The sales price from "casual sales".
a. "Casual sales" means:
(1) Sales of tangible personal property, or the furnishing of
services, of a nonrecurring nature, by the owner, if the seller, at
the time of the sale, is not engaged for profit in the business of
selling tangible personal property or services taxed under section
423.2.
(2) The sale of all or substantially all of the tangible personal
property or services held or used by a seller in the course of the
seller's trade or business for which the seller is required to hold a
sales tax permit when the seller sells or otherwise transfers the
trade or business to another person who shall engage in a similar
trade or business.
(3) Notwithstanding subparagraph (1), the sale, furnishing, or
performance of a service that is of a recurring nature by the owner
if, at the time of the sale, all of the following apply:
(a) The seller is not engaged for profit in the business of the
selling, furnishing, or performance of services taxed under section
423.2. For purposes of this subparagraph, the fact of the recurring
nature of selling, furnishing, or performance of services does not
constitute by itself engaging for profit in the business of selling,
furnishing, or performance of services.
(b) The owner of the business is the only person performing the
service.
(c) The owner of the business is a full-time student.
(d) The total gross receipts from the sales, furnishing, or
performance of services during the calendar year does not exceed five
thousand dollars.
b. The exemption under this subsection does not apply to
vehicles subject to registration, all-terrain vehicles, snowmobiles,
off-road motorcycles, off-road utility vehicles, aircraft, or
commercial or pleasure watercraft or water vessels.
40. The sales price from the sale of automotive fluids to a
retailer to be used either in providing a service which includes the
installation or application of the fluids in or on a motor vehicle,
which service is subject to section 423.2, subsection 6, or to be
installed in or applied to a motor vehicle which the retailer intends
to sell, which sale is subject to section 423.26. For purposes of
this subsection, automotive fluids are all those which are refined,
manufactured, or otherwise processed and packaged for sale prior to
their installation in or application to a motor vehicle. They
include but are not limited to motor oil and other lubricants,
hydraulic fluids, brake fluid, transmission fluid, sealants,
undercoatings, antifreeze, and gasoline additives.
41. The sales price from the rental of motion picture films,
video and audio tapes, video and audio discs, records, photos, copy,
scripts, or other media used for the purpose of transmitting that
which can be seen, heard, or read, if either of the following
conditions are met:
a. The lessee imposes a charge for the viewing of such media
and the charge for the viewing is subject to taxation under this
subchapter or is subject to use tax.
b. The lessee broadcasts the contents of such media for
public viewing or listening.
42. The sales price from the sale of tangible personal property
consisting of advertising material including paper to a person in
Iowa if that person or that person's agent will, subsequent to the
sale, send that advertising material outside this state and the
material is subsequently used solely outside of Iowa. For the
purpose of this subsection, "advertising material" means any
brochure, catalog, leaflet, flyer, order form, return envelope, or
similar item used to promote sales of property or services.
43. The sales price from the sale of property or of services
performed on property which the retailer transfers to a carrier for
shipment to a point outside of Iowa, places in the United States mail
or parcel post directed to a point outside of Iowa, or transports to
a point outside of Iowa by means of the retailer's own vehicles, and
which is not thereafter returned to a point within Iowa, except
solely in the course of interstate commerce or transportation. This
exemption shall not apply if the purchaser, consumer, or their agent,
other than a carrier, takes physical possession of the property in
Iowa.
44. The sales price from the sale of wine which is shipped from
outside Iowa and which meets the requirements for sales and use tax
exemption pursuant to section 123.187.
45. The sales price from the sale of property which is a
container, label, carton, pallet, packing case, wrapping paper,
twine, bag, bottle, shipping case, or other similar article or
receptacle sold to retailers or manufacturers for the purpose of
packaging or facilitating the transportation of tangible personal
property sold at retail or transferred in association with the
maintenance or repair of fabric or clothing.
46. The sales price from sales or rentals to a printer or
publisher of the following: acetate; anti-halation backing;
antistatic spray; back lining; base material used as a carrier for
light sensitive emulsions; blankets; blow-ups; bronze powder; carbon
tissue; codas; color filters; color separations; contacts; continuous
tone separations; creative art; custom dies and die cutting
materials; dampener sleeves; dampening solution; design and styling;
diazo coating; dot etching; dot etching solutions; drawings;
drawsheets; driers; duplicate films or prints; electronically
digitized images; electrotypes; end product of image modulation;
engravings; etch solutions; film; finished art or final art; fix;
fixative spray; flats; flying pasters; foils; goldenrod paper; gum;
halftones; illustrations; ink; ink paste; keylines; lacquer; lasering
images; layouts; lettering; line negatives and positives; linotypes;
lithographic offset plates; magnesium and zinc etchings; masking
paper; masks; masters; mats; mat service; metal toner; models and
modeling; mylar; negatives; nonoffset spray; opaque film process
paper; opaquing; padding compound; paper stock; photographic
materials: acids, plastic film, desensitizer emulsion, exposure
chemicals, fix, developers, and paper; photography, day rate;
photopolymer coating; photographs; photostats; photo-display tape;
phototypesetter materials; ph-indicator sticks; positives; press
pack; printing cylinders; printing plates, all types; process
lettering; proof paper; proofs and proof processes, all types; pumice
powder; purchased author alterations; purchased composition;
purchased phototypesetting; purchased stripping and pasteups; red
litho tape; reducers; roller covering; screen tints; sketches;
stepped plates; stereotypes; strip types; substrate; tints; tissue
overlays; toners; transparencies; tympan; typesetting; typography;
varnishes; veloxes; wood mounts; and any other items used in a like
capacity to any of the above enumerated items by the printer or
publisher to complete a finished product for sale at retail.
Expendable tools and supplies which are not enumerated in this
subsection are excluded from the exemption. "Printer" means that
portion of a person's business engaged in printing that completes a
finished product for ultimate sale at retail or means that portion of
a person's business used to complete a finished printed packaging
material used to package a product for ultimate sale at retail.
"Printer" does not mean an in-house printer who prints or
copyrights its own materials.
47. a. The sales price from the sale or rental of computers,
machinery, and equipment, including replacement parts, and materials
used to construct or self-construct computers, machinery, and
equipment if such items are any of the following:
(1) Directly and primarily used in processing by a manufacturer.
(2) Directly and primarily used to maintain the integrity of the
product or to maintain unique environmental conditions required for
either the product or the computers, machinery, and equipment used in
processing by a manufacturer, including test equipment used to
control quality and specifications of the product.
(3) Directly and primarily used in research and development of
new products or processes of processing.
(4) Computers used in processing or storage of data or
information by an insurance company, financial institution, or
commercial enterprise.
(5) Directly and primarily used in recycling or reprocessing of
waste products.
(6) Pollution-control equipment used by a manufacturer, including
but not limited to that required or certified by an agency of this
state or of the United States government.
b. The sales price from the sale of fuel used in creating
heat, power, steam, or for generating electrical current, or from the
sale of electricity, consumed by computers, machinery, or equipment
used in an exempt manner described in paragraph "a", subparagraph
(1), (2), (3), (5), or (6).
c. The sales price from the sale or rental of the following
shall not be exempt from the tax imposed by this subchapter:
(1) Hand tools.
(2) Point-of-sale equipment and computers.
(3) Industrial machinery, equipment, and computers, including
pollution-control equipment within the scope of section 427A.1,
subsection 1, paragraphs "h" and "i".
(4) Vehicles subject to registration, except vehicles subject to
registration which are directly and primarily used in recycling or
reprocessing of waste products.
d. As used in this subsection:
(1) "Commercial enterprise" includes businesses and
manufacturers conducted for profit and centers for data processing
services to insurance companies, financial institutions, businesses,
and manufacturers, but excludes professions and occupations and
nonprofit organizations.
(2) "Financial institution" means as defined in section
527.2.
(3) "Insurance company" means an insurer organized or
operating under chapter 508, 514, 515, 518, 518A, 519, or 520, or
authorized to do business in Iowa as an insurer or an insurance
producer under chapter 522B.
(4) "Manufacturer" means as defined in section 428.20, but
also includes contract manufacturers. A contract manufacturer is a
manufacturer that otherwise falls within the definition of
manufacturer under section 428.20, except that a contract
manufacturer does not sell the tangible personal property the
contract manufacturer processes on behalf of other manufacturers. A
business engaged in activities subsequent to the extractive process
of quarrying or mining, such as crushing, washing, sizing, or
blending of aggregate materials, is a manufacturer with respect to
these activities.
(5) "Processing" means a series of operations in which
materials are manufactured, refined, purified, created, combined, or
transformed by a manufacturer, ultimately into tangible personal
property. Processing encompasses all activities commencing with the
receipt or producing of raw materials by the manufacturer and ending
at the point products are delivered for shipment or transferred from
the manufacturer. Processing includes but is not limited to
refinement or purification of materials; treatment of materials to
change their form, context, or condition; maintenance of the quality
or integrity of materials, components, or products; maintenance of
environmental conditions necessary for materials, components, or
products; quality control activities; and construction of packaging
and shipping devices, placement into shipping containers or any type
of shipping devices or medium, and the movement of materials,
components, or products until shipment from the processor.
(6) "Receipt or producing of raw materials" means activities
performed upon tangible personal property only. With respect to raw
materials produced from or upon real estate, the receipt or producing
of raw materials is deemed to occur immediately following the
severance of the raw materials from the real estate.
47A. a. Subject to paragraph "b", the sales price from
the sale or rental of central office equipment or transmission
equipment primarily used by local exchange carriers and competitive
local exchange service providers as defined in section 476.96; by
franchised cable television operators, mutual companies, municipal
utilities, cooperatives, and companies furnishing communications
services that are not subject to rate regulation as provided in
chapter 476; by long distance companies as defined in section 477.10;
or for a commercial mobile radio service as defined in 47 C.F.R. §
20.3 in the furnishing of telecommunications services on a commercial
basis. For the purposes of this subsection, "central office
equipment" means equipment utilized in the initiating, processing,
amplifying, switching, or monitoring of telecommunications services.
"Transmission equipment" means equipment utilized in the process
of sending information from one location to another location.
"Central office equipment" and "transmission equipment" also
include ancillary equipment and apparatus which support, regulate,
control, repair, test, or enable such equipment to accomplish its
function.
b. The exemption in this subsection shall be phased in by
means of tax refunds as follows:
(1) If the sale or rental occurs on or after July 1, 2006,
through June 30, 2007, one-seventh of the state tax on the sales
price shall be refunded.
(2) If the sale or rental occurs on or after July 1, 2007,
through June 30, 2008, two-sevenths of the state tax on the sales
price shall be refunded.
(3) If the sale or rental occurs on or after July 1, 2008,
through June 30, 2009, three-sevenths of the state tax on the sales
price shall be refunded.
(4) If the sale or rental occurs on or after July 1, 2009,
through June 30, 2010, four-sevenths of the state tax on the sales
price shall be refunded.
(5) If the sale or rental occurs on or after July 1, 2010,
through June 30, 2011, five-sevenths of the state tax on the sales
price shall be refunded.
(6) If the sale or rental occurs on or after July 1, 2011,
through June 30, 2012, six-sevenths of the state tax on the sales
price shall be refunded.
(7) If the sale or rental occurs on or after July 1, 2012, the
sales price is exempt and no payment of tax and subsequent refund are
required.
c. For sales or rentals occurring on or after July 1, 2006,
through June 30, 2012, a refund of the tax paid as provided in
paragraph "b", subparagraph (1), (2), (3), (4), (5), or (6), must
be applied for, not later than six months after the month in which
the sale or rental occurred, in the manner and on the forms provided
by the department. Refunds shall only be of the state tax collected.
Refunds authorized shall accrue interest at the rate in effect under
section 421.7 from the first day of the second calendar month
following the date the refund claim is received by the department.
48. The sales price from the furnishing of the design and
installation of new industrial machinery or equipment, including
electrical and electronic installation.
49. The sales price from the sale of carbon dioxide in a liquid,
solid, or gaseous form, electricity, steam, and other taxable
services and the lease or rental of tangible personal property when
used by a manufacturer of food products to produce marketable food
products for human consumption, including but not limited to
treatment of material to change its form, context, or condition, in
order to produce the food product, maintenance of quality or
integrity of the food product, changing or maintenance of temperature
levels necessary to avoid spoilage or to hold the food product in
marketable condition, maintenance of environmental conditions
necessary for the safe or efficient use of machinery and material
used to produce the food product, sanitation and quality control
activities, formation of packaging, placement into shipping
containers, and movement of the material or food product until
shipment from the building of manufacture.
50. The sales price of sales of electricity, steam, or any
taxable service when purchased and used in the processing of tangible
personal property intended to be sold ultimately at retail or of any
fuel which is consumed in creating power, heat, or steam for
processing or for generating electric current.
51. The sales price of tangible personal property sold for
processing. Tangible personal property is sold for processing within
the meaning of this subsection only when it is intended that the
property will, by means of fabrication, compounding, manufacturing,
or germination, become an integral part of other tangible personal
property intended to be sold ultimately at retail; or for generating
electric current; or the property is a chemical, solvent, sorbent, or
reagent, which is directly used and is consumed, dissipated, or
depleted, in processing tangible personal property which is intended
to be sold ultimately at retail or consumed in the maintenance or
repair of fabric or clothing, and which may not become a component or
integral part of the finished product. The distribution to the
public of free newspapers or shoppers guides is a retail sale for
purposes of the processing exemption set out in this subsection and
in subsection 50.
52. The sales price from the sale of argon and other similar
gases to be used in the manufacturing process.
53. The sales price from the sale of electricity to water
companies assessed for property tax pursuant to sections 428.24,
428.26, and 428.28 which is used solely for the purpose of pumping
water from a river or well.
54. The sales price from the sale of wind energy conversion
property to be used as an electric power source and the sale of the
materials used to manufacture, install, or construct wind energy
conversion property used or to be used as an electric power source.
For purposes of this subsection, "wind energy conversion
property" means any device, including but not limited to a wind
charger, windmill, wind turbine, tower and electrical equipment, pad
mount transformers, power lines, and substation, which converts wind
energy to a form of usable energy.
55. The sales price from the sales of newspapers, free
newspapers, or shoppers guides and the printing and publishing of
such newspapers and shoppers guides, and envelopes for advertising.
56. The sales price from the sale of motor fuel and special fuel
consumed for highway use or in watercraft or aircraft where the fuel
tax has been imposed and paid and no refund has been or will be
allowed and the sales price from the sales of ethanol blended
gasoline, as defined in section 214A.1.
57. The sales price from all sales of food and food ingredients.
However, as used in this subsection, a sale of "food and food
ingredients" does not include a sale of alcoholic beverages, candy,
or dietary supplements; food sold through vending machines; or sales
of prepared food, soft drinks, or tobacco. For the purposes of this
subsection:
a. "Alcoholic beverages" means beverages that are suitable
for human consumption and contain one-half of one percent or more of
alcohol by volume.
b. "Candy" means a preparation of sugar, honey, or other
natural or artificial sweeteners in combination with chocolate,
fruits, nuts, or other ingredients or flavorings in the form of bars,
drops, or pieces. Candy shall not include any preparation containing
flour and shall require no refrigeration.
c. "Dietary supplement" means any product, other than
tobacco, intended to supplement the diet that contains one or more of
the following dietary ingredients:
(1) A vitamin.
(2) A mineral.
(3) An herb or other botanical.
(4) An amino acid.
(5) A dietary substance for use by humans to supplement the diet
by increasing the total dietary intake.
(6) A concentrate, metabolite, constituent, extract, or
combination of any of the ingredients in subparagraphs (1) through
(5) that is intended for ingestion in tablet, capsule, powder,
softgel, gelcap, or liquid form, or if not intended for ingestion in
such a form, is not represented as conventional food and is not
represented for use as a sole item of a meal or of the diet; and is
required to be labeled as a dietary supplement, identifiable by the
"supplement facts" box found on the label and as required pursuant to
21 C.F.R. § 101.36.
d. "Food and food ingredients" means substances, whether in
liquid, concentrated, solid, frozen, dried, or dehydrated form, that
are sold for ingestion or chewing by humans and are consumed for
their taste or nutritional value.
e. "Food sold through vending machines" means food dispensed
from a machine or other mechanical device that accepts payment, other
than food which would be qualified for exemption under subsection 58
if purchased with a coupon described in subsection 58.
f. "Prepared food" means any of following:
(1) Food sold in a heated state or heated by the seller,
including food sold by a caterer.
(2) Two or more food ingredients mixed or combined by the seller
for sale as a single item.
(3) "Prepared food", for the purposes of this paragraph, does
not include food that is any of the following:
(a) Only cut, repackaged, or pasteurized by the seller.
(b) Eggs, fish, meat, poultry, and foods containing these raw
animal foods requiring cooking by the consumer as recommended by the
United States food and drug administration, ch. 3, part 401.11 of its
food code, so as to prevent foodborne illnesses.
(c) Bakery items sold by the seller which baked them. The words
"bakery items" includes but is not limited to breads, rolls,
buns, biscuits, bagels, croissants, pastries, donuts, Danish, cakes,
tortes, pies, tarts, muffins, bars, cookies, and tortillas.
(d) Food sold without eating utensils provided by the seller in
an unheated state as a single item which is priced by weight or
volume.
(4) Food sold with eating utensils provided by the seller,
including plates, knives, forks, spoons, glasses, cups, napkins, or
straws. A plate does not include a container or packaging used to
transport food.
g. "Soft drinks" means nonalcoholic beverages that contain
natural or artificial sweeteners. "Soft drinks" does not include
beverages that contain milk or milk products; soy, rice, or similar
milk substitutes; or greater than fifty percent of vegetable or fruit
juice by volume.
h. "Tobacco" means cigarettes, cigars, chewing or pipe
tobacco, or any other item that contains tobacco.
58. The sales price from the sale of items purchased with coupons
issued under the federal Food Stamp Act of 1977, 7 U.S.C. § 2011 et
seq.
59. In transactions in which tangible personal property is traded
toward the sales price of other tangible personal property, that
portion of the sales price which is not payable in money to the
retailer is exempted from the taxable amount if the following
conditions are met:
a. The tangible personal property traded to the retailer is
the type of property normally sold in the regular course of the
retailer's business.
b. The tangible personal property traded to the retailer is
intended by the retailer to be ultimately sold at retail or is
intended to be used by the retailer or another in the remanufacturing
of a like item.
60. The sales price from the sale or rental of prescription
drugs, durable medical equipment, mobility enhancing equipment,
prosthetic devices, and other medical devices intended for human use
or consumption.
For the purposes of this subsection:
a. "Drug" means a compound, substance, or preparation, and
any component of a compound, substance, or preparation, other than
food and food ingredients, dietary supplements, or alcoholic
beverages, which is any of the following:
(1) Recognized in the official United States pharmacopoeia,
official homeopathic pharmacopoeia of the United States, or official
national formulary, and supplement to any of them.
(2) Intended for use in the diagnosis, cure, mitigation,
treatment, or prevention of disease.
(3) Intended to affect the structure or any function of the body.
b. "Durable medical equipment" means equipment, including
repair and replacement parts, but does not include mobility enhancing
equipment, to which all of the following apply:
(1) Can withstand repeated use.
(2) Is primarily and customarily used to serve a medical purpose.
(3) Generally is not useful to a person in the absence of illness
or injury.
(4) Is not worn in or on the body.
(5) Is for home use only.
(6) Is prescribed by a practitioner.
c. "Mobility enhancing equipment" means equipment, including
repair and replacement parts, but does not include durable medical
equipment, to which all of the following apply:
(1) Is primarily and customarily used to provide or increase the
ability to move from one place to another and which is appropriate
for use either in a home or a motor vehicle.
(2) Is not generally used by persons with normal mobility.
(3) Does not include any motor vehicle or equipment on a motor
vehicle normally provided by a motor vehicle manufacturer.
(4) Is prescribed by a practitioner.
d. "Other medical device" means equipment or a supply that is
not a drug, durable medical equipment, mobility enhancing equipment,
or prosthetic device. "Other medical devices" includes but is
not limited to ostomy, urological, and tracheostomy supplies,
diabetic testing materials, hypodermic syringes and needles,
anesthesia trays, biopsy trays and biopsy needles, cannula systems,
catheter trays and invasive catheters, fistula sets, irrigation
solutions, intravenous administering solutions and stopcocks,
myelogram trays, small vein infusion kits, spinal puncture trays, and
venous blood sets intended to be dispensed for human use with or
without a prescription to an ultimate user.
e. "Practitioner" means a practitioner as defined in section
155A.3, or a person licensed to prescribe drugs.
f. "Prescription" means an order, formula, or recipe issued
in any form of oral, written, electronic, or other means of
transmission by a practitioner.
g. "Prescription drug" means a drug intended to be dispensed
to an ultimate user pursuant to a prescription drug order, formula,
or recipe issued in any form of oral, written, electronic, or other
means of transmission by a duly licensed practitioner, or oxygen or
insulin dispensed for human consumption with or without a
prescription drug order or medication order.
h. "Prosthetic device" means a replacement, corrective, or
supportive device including repair and replacement parts for the same
worn on or in the body to do any of the following:
(1) Artificially replace a missing portion of the body.
(2) Prevent or correct physical deformity or malfunction.
(3) Support a weak or deformed portion of the body.
"Prosthetic device" includes but is not limited to orthopedic
or orthotic devices, ostomy equipment, urological equipment,
tracheostomy equipment, and intraocular lenses.
i. "Ultimate user" means an individual who has lawfully
obtained and possesses a prescription drug or medical device for the
individual's own use or for the use of a member of the individual's
household, or an individual to whom a prescription drug or medical
device has been lawfully supplied, administered, dispensed, or
prescribed.
61. The sales price from services furnished by aerial commercial
and charter transportation services.
62. The sales price from the sale of raffle tickets for a raffle
licensed pursuant to section 99B.5.
63. The sales price from the sale of tangible personal property
which will be given as prizes to players in games of skill, games of
chance, raffles, and bingo games as defined in chapter 99B.
64. The sales price from the sale of a modular home, as defined
in section 435.1, to the extent of the portion of the purchase price
of the modular home which is not attributable to the cost of the
tangible personal property used in the processing of the modular
home. For purposes of this exemption, the portion of the purchase
price which is not attributable to the cost of the tangible personal
property used in the processing of the modular home is forty percent.
65. The sales price from charges paid to a provider for access to
on-line computer services. For purposes of this subsection,
"on-line computer service" means a service that provides or
enables computer access by multiple users to the internet or to other
information made available through a computer server or other device.
66. The sales price from the sale or rental of information
services. "Information services" means every business activity,
process, or function by which a seller or its agent accumulates,
prepares, organizes, or conveys data, facts, knowledge, procedures,
and like services to a buyer or its agent of such information through
any tangible or intangible medium. Information accumulated,
prepared, or organized for a buyer or its agent is an information
service even though it may incorporate preexisting components of data
or other information. "Information services" includes but is not
limited to database files, mailing lists, subscription files, market
research, credit reports, surveys, real estate listings, bond rating
reports, abstracts of title, bad check lists, broadcasting rating
services, wire services, and scouting reports, or other similar
items.
67. The sales price of a sale at retail if the substance of the
transaction is delivered to the purchaser digitally, electronically,
or utilizing cable, or by radio waves, microwaves, satellites, or
fiber optics.
68. a. The sales price from the sale of an article of
clothing designed to be worn on or about the human body if all of the
following apply:
(1) The sales price of the article is less than one hundred
dollars.
(2) The sale takes place during a period beginning at 12:01 a.m.
on the first Friday in August and ending at midnight on the following
Saturday.
b. This subsection does not apply to any of the following:
(1) Sport or recreational equipment and protective equipment.
(2) Clothing accessories or equipment.
(3) The rental of clothing.
c. For purposes of this subsection:
(1) "Clothing" means all human wearing apparel suitable for
general use. "Clothing" includes but is not limited to the
following: aprons, household and shop; athletic supporters; baby
receiving blankets; bathing suits and caps; beach capes and coats;
belts and suspenders; boots; coats and jackets; costumes; diapers
(children and adults, including disposable diapers); earmuffs;
footlets; formal wear; garters and garter belts; girdles; gloves and
mittens for general use; hats and caps; hosiery; insoles for shoes;
lab coats; neckties; overshoes; pantyhose; rainwear; rubber pants;
sandals; scarves; shoes and shoelaces; slippers; sneakers; socks and
stockings; steel-toed shoes; underwear; uniforms, athletic and
nonathletic; and wedding apparel.
"Clothing" does not include the following: belt buckles sold
separately; costume masks sold separately; patches and emblems sold
separately; sewing equipment and supplies (including but not limited
to knitting needles, patterns, pins, scissors, sewing machines,
sewing needles, tape measures, and thimbles); and sewing materials
that become part of clothing (including but not limited to buttons,
fabric, lace, thread, yarn, and zippers).
(2) "Clothing accessories or equipment" means incidental
items worn on the person or in conjunction with clothing.
"Clothing accessories or equipment" includes but is not limited
to the following: briefcases; cosmetics; hair notions (including but
not limited to barrettes, hair bows, and hair nets); handbags;
handkerchiefs; jewelry; sunglasses, nonprescription; umbrellas;
wallets; watches; and wigs and hairpieces.
(3) "Protective equipment" means items for human wear and
designed as protection for the wearer against injury or disease or as
protection against damage or injury of other persons or property but
not suitable for general use. "Protective equipment" includes
but is not limited to the following: breathing masks; clean room
apparel and equipment; ear and hearing protectors; face shields; hard
hats; helmets; paint or dust respirators; protective gloves; safety
glasses and goggles; safety belts; tool belts; and welders gloves and
masks.
(4) "Sport or recreational equipment" means items designed
for human use and worn in conjunction with an athletic or
recreational activity that are not suitable for general use.
"Sport or recreational equipment" includes but is not limited to
the following: ballet and tap shoes; cleated or spiked athletic
shoes; gloves (including but not limited to baseball, bowling,
boxing, hockey, and golf); goggles; hand and elbow guards; life
preservers and vests; mouth guards; roller and ice skates; shin
guards; shoulder pads; ski boots; waders; and wetsuits and fins.
69. The sales price from charges paid for the delivery of
electricity or natural gas if the sale or furnishing of the
electricity or natural gas or its use is exempt from the tax on sales
prices imposed under this subchapter or from the use tax imposed
under subchapter III.
69A. The sales price from surcharges paid for E911 service and
wireless E911 service pursuant to chapter 34A.
70. The sales price of delivery charges. This exemption does not
apply to the delivery of electric energy or natural gas.
71. The sales price from sales of tangible personal property used
or to be used as railroad rolling stock for transporting persons or
property, or as materials or parts therefor.
72. The sales price from the sales of special fuel for diesel
engines consumed or used in the operation of ships, barges, or
waterborne vessels which are used primarily in or for the
transportation of property or cargo, or the conveyance of persons for
hire on rivers bordering on the state if the fuel is delivered by the
seller to the purchaser's barge, ship, or waterborne vessel while it
is afloat upon such a river.
73. The sales price from sales of vehicles subject to
registration or subject only to the issuance of a certificate of
title and sales of aircraft subject to registration under section
328.20.
74. The sales price from the sale of aircraft for use in a
scheduled interstate federal aviation administration certificated air
carrier operation.
75. The sales price from the sale or rental of aircraft; the sale
or rental of tangible personal property permanently affixed or
attached as a component part of the aircraft, including but not
limited to repair or replacement materials or parts; and the sales
price of all services used for aircraft repair, remodeling, and
maintenance services when such services are performed on aircraft,
aircraft engines, or aircraft component materials or parts. For the
purposes of this exemption, "aircraft" means aircraft used in a
scheduled interstate federal aviation administration certificated air
carrier operation.
76. The sales price from the sale or rental of tangible personal
property permanently affixed or attached as a component part of the
aircraft, including but not limited to repair or replacement
materials or parts; and the sales price of all services used for
aircraft repair, remodeling, and maintenance services when such
services are performed on aircraft, aircraft engines, or aircraft
component materials or parts. For the purposes of this exemption,
"aircraft" means aircraft used in nonscheduled interstate federal
aviation administration certificated air carrier operation operating
under 14 C.F.R. ch. 1, pt. 135.
77. The sales price from the sale of aircraft to an aircraft
dealer who in turn rents or leases the aircraft if all of the
following apply:
a. The aircraft is kept in the inventory of the dealer for
sale at all times.
b. The dealer reserves the right to immediately take the
aircraft from the renter or lessee when a buyer is found.
c. The renter or lessee is aware that the dealer will
immediately take the aircraft when a buyer is found.
If an aircraft exempt under this subsection is used for any
purpose other than leasing or renting, or the conditions in
paragraphs "a", "b", and "c" are not continuously met,
the dealer claiming the exemption under this subsection is liable for
the tax that would have been due except for this subsection. The tax
shall be computed upon the original purchase price.
78. a. The sales price from sales or rental of tangible
personal property, or services rendered by any entity where the
profits from the sales or rental of the tangible personal property,
or services rendered, are used by or donated to a nonprofit entity
that is exempt from federal income taxation pursuant to section
501(c)(3) of the Internal Revenue Code, a government entity, or a
nonprofit private educational institution, and where the entire
proceeds from the sales, rental, or services are expended for any of
the following purposes:
(1) Educational.
(2) Religious.
(3) Charitable. A charitable act is an act done out of goodwill,
benevolence, and a desire to add to or to improve the good of
humankind in general or any class or portion of humankind, with no
pecuniary profit inuring to the person performing the service or
giving the gift.
b. For purposes of this exemption, an organization that meets
the requirements of paragraph "a" and which is created for the
sole or primary purpose of providing athletic activities to youth
shall be considered created for an educational purpose.
c. This exemption does not apply to the sales price from
games of skill, games of chance, raffles, and bingo games as defined
in chapter 99B. This exemption is disallowed on the amount of the
sales price only to the extent the profits from the sales, rental, or
services are not used by or donated to the appropriate entity and
expended for educational, religious, or charitable purposes.
79. The sales price from the sale or rental of tangible personal
property or from services furnished to a recognized community action
agency as provided in section 216A.93 to be used for the purposes of
the agency.
80. a. For purposes of this subsection, "designated exempt
entity" means an entity which is designated in section 423.4,
subsection 1 or 6.
b. If a contractor, subcontractor, or builder is to use
building materials, supplies, and equipment in the performance of a
construction contract with a designated exempt entity, the person
shall purchase such items of tangible personal property without
liability for the tax if such property will be used in the
performance of the construction contract and a purchasing agent
authorization letter and an exemption certificate, issued by the
designated exempt entity, are presented to the retailer. The sales
price of building materials, supplies, or equipment is exempt from
tax by this subsection only to the extent the building materials,
supplies, or equipment are completely consumed in the performance of
the construction contract with the designated exempt entity.
c. Where the owner, contractor, subcontractor, or builder is
also a retailer holding a retail sales tax permit and transacting
retail sales of building materials, supplies, and equipment, the tax
shall not be due when materials are withdrawn from inventory for use
in construction performed for a designated exempt entity if an
exemption certificate is received from such entity.
d. Tax shall not apply to tangible personal property
purchased and consumed by a manufacturer as building materials,
supplies, or equipment in the performance of a construction contract
for a designated exempt entity, if a purchasing agent authorization
letter and an exemption certificate are received from such entity and
presented to a retailer.
81. The sales price from the sales of lottery tickets or shares
pursuant to chapter 99G.
82. a. The sales price from the sale or rental of
core-making, mold-making, and sand-handling machinery and equipment,
including replacement parts, directly and primarily used in the
mold-making process by a foundry.
b. The sales price from the sale of fuel used in creating
heat, power, steam, or for generating electric current, or from the
sale of electricity, consumed by core-making, mold-making, and
sand-handling machinery and equipment used directly and primarily in
the mold-making process by a foundry.
c. The sales price from the furnishing of the design and
installation, including electrical and electronic installation, of
core-making, mold-making, and sand-handling machinery and equipment
used directly and primarily in the mold-making process by a foundry.
83. The sales price from noncustomer point of sale or noncustomer
automated teller machine access or service charges assessed by a
financial institution. For purposes of this subsection, "financial
institution" means the same as defined in section 527.2.
84. a. Subject to paragraph "b", the sales price from the
sale or furnishing of metered gas, electricity, and fuel, including
propane and heating oil, to residential customers which is used to
provide energy for residential dwellings and units of apartment and
condominium complexes used for human occupancy.
b. The exemption in this subsection shall be phased in by
means of a reduction in the tax rate as follows:
(1) If the date of the utility billing or meter reading cycle of
the residential customer for the sale or furnishing of metered gas
and electricity is on or after January 1, 2004, through December 31,
2004, or if the sale or furnishing of fuel for purposes of
residential energy and the delivery of the fuel occurs on or after
January 1, 2004, through December 31, 2004, the rate of tax is two
percent of the sales price.
(2) If the date of the utility billing or meter reading cycle of
the residential customer for the sale or furnishing of metered gas
and electricity is on or after January 1, 2005, through December 31,
2005, or if the sale or furnishing of fuel for purposes of
residential energy and the delivery of the fuel occurs on or after
January 1, 2005, through December 31, 2005, the rate of tax is one
percent of the sales price.
(3) If the date of the utility billing or meter reading cycle of
the residential customer for the sale or furnishing of metered gas
and electricity is on or after January 1, 2006, or if the sale,
furnishing, or service of fuel for purposes of residential energy and
the delivery of the fuel occurs on or after January 1, 2006, the rate
of tax is zero percent of the sales price.
c. The exemption in this subsection does not apply to local
option sales and services tax imposed pursuant to chapters 423B and
423E.
85. The sales price from the sale of the following items:
self-propelled building equipment, pile drivers, motorized
scaffolding, or attachments customarily drawn or attached to
self-propelled building equipment, pile drivers, and motorized
scaffolding, including auxiliary attachments which improve the
performance, safety, operation, or efficiency of the equipment, and
replacement parts and are directly and primarily used by contractors,
subcontractors, and builders for new construction, reconstruction,
alterations, expansion, or remodeling of real property or structures.
86. The sales price from services performed on a vessel if all of
the following apply:
a. The vessel is a licensed vessel under the laws of the
United States coast guard.
b. The service is used to repair or restore a defect in the
vessel.
c. The vessel is engaged in interstate commerce and will
continue in interstate commerce once the repairs or restoration is
completed.
d. The vessel is in navigable water that borders a boundary
of this state.
For purposes of this exemption, "vessel" includes a ship,
barge, or other waterborne vessel.
87. The sales price from the sales of toys to a nonprofit
organization exempt from federal income tax under section 501 of the
Internal Revenue Code that purchases the toys from donations
collected by the nonprofit organization and distributes the toys to
children at no cost.
88. The sales price from the sale of building materials,
supplies, goods, wares, or merchandise sold to a nonprofit Iowa
affiliate of a nonprofit international organization whose primary
activity is the promotion of the construction, remodeling, or
rehabilitation of one-family or two-family dwellings for use by
low-income families and where the building materials, supplies,
goods, wares, or merchandise are used in the construction,
remodeling, or rehabilitation of such dwellings.
89. a. The sales price of all goods, wares, or merchandise
sold, or of services furnished, which are used in the fulfillment of
a written construction contract for the original construction of a
building or structure to be used as a collaborative educational
facility.
b. The sales price of all goods, wares, or merchandise sold,
or of services furnished, which are used in the fulfillment of a
written construction contract for the construction of additions or
modifications to a building or structure used as part of a
collaborative educational facility.
c. To receive the exemption provided in paragraph "a" or
"b", a collaborative educational facility must meet all of the
criteria in paragraph "d" or "e":
d. (1) The contract for construction of the building or
structure is entered into on or after April 1, 2003.
(2) The building or structure is located within the corporate
limits of a city in the state with a population in excess of one
hundred ninety-five thousand residents.
(3) The sole purpose of the building or structure is to provide
facilities for a collaborative of public and private educational
institutions that provide education to students.
(4) The owner of the building or structure is a nonprofit
corporation governed by chapter 504 or former chapter 504A which is
exempt from federal income tax pursuant to section 501(a) of the
Internal Revenue Code.
e. (1) The contract for construction of the building or
structure is entered into on or after May 15, 2007.
(2) The sole purpose of the building or structure is to provide
facilities for a regional academy under a collaborative of public and
private educational institutions that includes a community college
established under chapter 260C that provide education to students.
(3) The owner of the building or structure is a qualified
charitable nonprofit corporation governed by chapter 504 or former
chapter 504A which is exempt from federal income tax pursuant to
section 501(c)(3) of the Internal Revenue Code.
f. References to "building" or "structure" in
paragraphs "d" and "e" include any additions or modifications
to the building or structure.
90. The sales price from the sale of solar energy equipment. For
purposes of this subsection, "solar energy equipment" means
equipment that is primarily used to collect and convert incident
solar radiation into thermal, mechanical, or electrical energy or
equipment that is primarily used to transform such converted solar
energy to a storage point or to a point of use.
91. a. The sales price from the sale of coins, currency, or
bullion.
b. For purposes of this subsection:
(1) "Bullion" means bars, ingots, or commemorative medallions
of gold, silver, platinum, palladium, or a combination of these where
the value of the metal depends on its content and not the form.
(2) "Coins" or "currency" means a coin or currency made
of gold, silver, or other metal or paper which is or has been used as
legal tender.
92. a. (1) The sales price from the sale or rental of
computers and equipment that are necessary for the maintenance and
operation of a web search portal and property whether directly or
indirectly connected to the computers, including but not limited to
cooling systems, cooling towers, and other temperature control
infrastructure; power infrastructure for transformation,
distribution, or management of electricity used for the maintenance
and operation of the web search portal, including but not limited to
exterior dedicated business-owned substations, back-up power
generation systems, battery systems, and related infrastructure; and
racking systems, cabling, and trays, which are necessary for the
maintenance and operation of the web search portal.
(2) The sales price of back-up power generation fuel, that is
purchased by a web search portal business for use in the items listed
in subparagraph (1).
(3) The sales price of electricity purchased for use in providing
a web search portal.
b. For the purpose of claiming this exemption, all of the
following requirements shall be met:
(1) The business of the purchaser or renter shall be as a
provider of a web search portal.
(2) The web search portal business shall have a physical location
in the state that is used for the operations and maintenance of the
web search portal site on the internet including but not limited to
research and development to support capabilities to organize
information and to provide internet access, navigation, and search.
(3) The web search portal business shall make a minimum
investment in an Iowa physical location of two hundred million
dollars within the first six years of operation in Iowa beginning
with the date the web search portal business initiates site
preparation activities. The minimum investment includes the initial
investment, including land and subsequent acquisition of additional
adjacent land and subsequent investment at the Iowa location.
(4) The web search portal business shall purchase, option, or
lease Iowa land not later than December 31, 2008, for any initial
investment. However, the December 31, 2008, date shall not affect
the future purchases of adjacent land and additional investment in
the initial or adjacent land to qualify as part of the minimum
investment for purposes of this exemption.
c. This exemption applies from the date of the initial
investment in or the initiation of site preparation activities for
the web search portal facility as described in paragraph "b".
For purposes of claiming this exemption, the requirements may be met
by aggregating the various Iowa investments and other requirements of
the web search portal business's affiliates. This exemption applies
to affiliates of the web search portal business.
d. Failure to meet eighty percent of the minimum investment
amount requirement specified in paragraph "b" within the first
six years of operation from the date the web search portal business
initiates site preparation activities will result in the web search
portal business losing the right to claim this exemption and the web
search portal business shall pay all sales or use tax that would have
been due on the purchase or rental or use of the items listed in this
exemption, plus any applicable penalty and interest imposed by
statute.
e. For purposes of this subsection:
(1) "Affiliate" means an entity that directly or indirectly
controls, is controlled with or by, or is under common control with
another entity.
(2) "Control" means any of the following:
(a) In the case of a United States corporation, the ownership,
directly or indirectly, of fifty percent or more of the voting power
to elect directors.
(b) In the case of a foreign corporation, if the voting power to
elect the directors is less than fifty percent, the maximum amount
allowed by applicable law.
(c) In the case of an entity other than a corporation, fifty
percent or more ownership interest in the entity, or the power to
direct the management of the entity.
(3) "Web search portal business" means an entity among whose
primary businesses is to provide a search portal to organize
information; to access, search, and navigate the internet, including
research and development to support capabilities to organize
information; and to provide internet access, navigation, and search
functionalities.
93. a. (1) The sales price from the sale or rental of
computers and equipment that are necessary for the maintenance and
operation of a web search portal business and property whether
directly or indirectly connected to the computers, including but not
limited to cooling systems, cooling towers, and other temperature
control infrastructure; power infrastructure for transformation,
distribution, or management of electricity used for the maintenance
and operation of the web search portal business, including but not
limited to exterior dedicated business-owned substations, back-up
power generation systems, battery systems, and related
infrastructure; and racking systems, cabling, and trays, which are
necessary for the maintenance and operation of the web search portal
business.
(2) The sales price of back-up power generation fuel, that is
purchased by a web search portal business for use in the items listed
in subparagraph (1).
(3) The sales price of electricity purchased for use by a web
search portal business.
b. For the purpose of claiming this exemption, all of the
following requirements shall be met:
(1) The purchaser or renter shall be a web search portal
business.
(2) The web search portal business shall have a physical location
in the state that is used for the operations and maintenance of the
web search portal business.
(3) The web search portal business shall make a minimum
investment in an Iowa physical location of two hundred million
dollars within the first six years of operation in Iowa beginning
with the date the web search portal business initiates site
preparation activities. The minimum investment includes the initial
investment, including land and subsequent acquisition of additional
adjacent land and subsequent investment at the Iowa location.
(4) The web search portal business shall purchase, option, or
lease Iowa land not later than December 31, 2008, for any initial
investment. However, the December 31, 2008, date shall not affect
the future purchases of adjacent land and additional investment in
the initial or adjacent land to qualify as part of the minimum
investment for purposes of this exemption.
c. This exemption applies from the date of the initial
investment in or the initiation of site preparation activities for
the web search portal facility as described in paragraph "b".
For purposes of claiming this exemption, the requirements may be met
by aggregating the various Iowa investments and other requirements of
the web search portal business's affiliates. This exemption applies
to affiliates of the web search portal business.
d. Failure to meet eighty percent of the minimum investment
amount requirement specified in paragraph "b" within the first
six years of operation from the date the web search portal business
initiates site preparation activities will result in the web search
portal business losing the right to claim this web search portal
business exemption and the web search portal business shall pay all
sales or use tax that would have been due on the purchase or rental
or use of the items listed in this exemption, plus any applicable
penalty and interest imposed by statute.
e. For purposes of this subsection:
(1) "Affiliate" means an entity that directly or indirectly
controls, is controlled with or by, or is under common control with
another entity.
(2) "Control" means any of the following:
(a) In the case of a United States corporation, the ownership,
directly or indirectly, of fifty percent or more of the voting power
to elect directors.
(b) In the case of a foreign corporation, if the voting power to
elect the directors is less than fifty percent, the maximum amount
allowed by applicable law.
(c) In the case of an entity other than a corporation, fifty
percent or more ownership interest in the entity, or the power to
direct the management of the entity.
(3) "Web search portal business" means an entity whose
business among other businesses is to provide a search portal to
organize information; to access, search, and navigate the internet,
including research and development to support capabilities to
organize information; or to provide internet access, navigation, or
search functionalities.
94. Water use permit fees paid pursuant to section 455B.265.
95. a. (1) The sales price from the sale or rental of
computers and equipment that are necessary for the maintenance and
operation of a data center business and property whether directly or
indirectly connected to the computers, including but not limited to
cooling systems, cooling towers, and other temperature control
infrastructure; power infrastructure for transformation,
distribution, or management of electricity used for the maintenance
and operation of the data center business, including but not limited
to exterior dedicated business-owned substations, backup power
generation systems, battery systems, and related infrastructure; and
racking systems, cabling, and trays, which are necessary for the
maintenance and operation of the data center business.
(2) The sales price of backup power generation fuel that is
purchased by a data center business for use in the items listed in
subparagraph (1).
(3) The sales price of electricity purchased for use by a data
center business.
b. For the purpose of claiming this exemption, all of the
following requirements shall be met:
(1) The purchaser or renter shall be a data center business.
(2) The data center business shall have a physical location in
the state that is, in the aggregate, at least five thousand square
feet in size that is used for the operations and maintenance of the
data center business.
(3) The data center business shall make a minimum investment in
an Iowa physical location of two hundred million dollars within the
first six years of operation in Iowa beginning with the date the data
center business initiates site preparation activities. The minimum
investment includes the initial investment, including land and
subsequent acquisition of additional adjacent land and subsequent
investment at the Iowa location.
(4) The data center business shall comply with the sustainable
design and construction standards established by the state building
code commissioner pursuant to section 103A.8B.
c. This exemption applies from the date of the initial
investment in or the initiation of site preparation activities for
the data center business facility as described in paragraph "b".
d. Failure to meet eighty percent of the minimum investment
amount requirement specified in paragraph "b" within the first
six years of operation from the date the data center business
initiates site preparation activities will result in the data center
business losing the right to claim this data center business
exemption and the data center business shall pay all sales or use tax
that would have been due on the purchase or rental or use of the
items listed in this exemption, plus any applicable penalty and
interest imposed by statute.
e. For purposes of this subsection:
(1) "Data center" means a building rehabilitated or
constructed to house a group of networked server computers in one
physical location in order to centralize the storage, management, and
dissemination of data and information pertaining to a particular
business, taxonomy, or body of knowledge. A data center business's
facility typically includes the mechanical and electrical systems,
redundant or backup power supplies, redundant data communications
connections, environmental controls, and fire suppression systems. A
data center business's facility also includes a restricted access
area employing advanced physical security measures such as video
surveillance systems and card-based security or biometric security
access systems.
(2) "Data center business" means an entity whose business
among other businesses, is to operate a data center. Section History: Recent Form
2003 Acts, 1st Ex, ch 2, §96, 205; 2004 Acts, ch 1022, §4; 2004
Acts, ch 1049, §191; 2004 Acts, ch 1073, §26, 27; 2004 Acts, ch 1086,
§105; 2004 Acts, ch 1133, §1; 2004 Acts, ch 1175, §320, 394; 2005
Acts, ch 71, §1; 2005 Acts, ch 134, §1; 2005 Acts, ch 140, §6--11,
16, 30, 44--46, 72, 73; 2006 Acts, ch 1001, §1, 2, 4, 5; 2006 Acts,
ch 1134, §1; 2006 Acts, ch 1158, §40--44; 2006 Acts, ch 1161, §5, 7;
2006 Acts, ch 1162, §1; 2006 Acts, ch 1185, §128; 2007 Acts, ch 22,
§74, 75; 2007 Acts, ch 186, §21, 22; 2007 Acts, ch 199, §1; 2007
Acts, ch 215, §112, 125; 2008 Acts, ch 1006, §1; 2008 Acts, ch 1163,
§1; 2008 Acts, ch 1184, §55, 56; 2009 Acts, ch 133, §144; 2009 Acts,
ch 179, §136, 197, 218--220
Referred to in § 15A.9, 321.105A, 423.1, 423.2, 423.4, 423.6,
423.33, 423C.3, 423D.3, 427.1(35a, 35b, 36a, 36b, 37a), 476B.4 Footnotes
Former § 423.3 repealed effective July 1, 2004, by 2003 Acts, 1st
Ex, ch 2, §151, 205
2005 amendments to subsections 2, 37, and 49 take effect June 3,
2005, and apply retroactively to July 1, 2004; 2005 Acts, ch 140, §16
2005 amendment to subsection 5 takes effect June 3, 2005, and
applies retroactively to January 1, 1998; limitations on total
refunds; filing deadline; proration of refund amounts; 2005 Acts, ch
140, §72, 73; 2006 Acts, ch 1158, §66, 69
2006 amendment to subsection 11 takes effect June 2, 2006, and
applies retroactively to January 1, 1992; for sales occurring before
June 2, 2006, refunds limited to $25,000 in the aggregate and not
allowed unless claims are filed prior to October 1, 2006; 2006 Acts,
ch 1161, §6, 7
For claims arising under subsection 89, paragraph d, for original
construction projects occurring between April 1, 2003, and June 30,
2005, refunds not allowed unless claims are filed by June 30, 2006;
2006 Acts, ch 1001, §4, 5
For claims arising under subsection 89, paragraph e, for original
construction projects occurring between May 15, 2007, and June 30,
2007, refunds not allowed unless claims are filed by October 1, 2007;
2007 Acts, ch 215, §125
2009 amendment to subsection 78 takes effect May 26, 2009, and
applies retroactively to July 1, 1998; October 1, 2009, filing
deadline and limitation on claims resulting from transactions
occurring between July 1, 1998, and May 26, 2009; 2009 Acts, ch 179,
§219, 220