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Governor Signs Equipment
Tax Exemptiion
Governor Tom Vilsack signed S.F. 136 on May 20th, which contains language exempting certain types of construction equipment and parts from both the local option sales tax (Chapter 422 B.8) and the school infrastructure sales tax (Chapter 422 E.3). Specifically, the equipment exempted is: "…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…".

This provision becomes effective upon signature by the Governor. AGC/I will send you information in the next few days regarding exemption certificates that will need to be presented by a purchaser seeking the exemption.


Refunds For School Infrastructure Sales Tax
Governor Vilsack also signed S.F. 469 which contains a provision requested by AGC of Iowa. It allows a construction contractor a refund of the school infrastructure sales tax on goods, wares or merchandise under the same conditions that a contractor may currently seek a refund of the local option sales tax. Those provisions are contained in 422 B.11 and are as follows:

Construction contractor refunds

1. Construction contractors may make application to the department for a refund of the additional local sales and services tax paid under this chapter by reason of taxes paid on goods, wares, or merchandise under the following conditions:
a. The goods, wares, or merchandise are incorporated into an improvement to real estate in fulfillment of a written contract fully executed prior to the date of the imposition or increase in rate of a local sales and services tax under this chapter. The refund shall not apply to equipment transferred in fulfillment of a mixed construction contract.
b. The contractor has paid to the department or to a retailer the full amount of the state and local tax.
c. The claim is filed on forms provided by the department and is filed within six months of the date the tax is paid.
2. The department shall pay the refund from the appropriate city's or county's account in the local sales and services tax fund.
3. A contractor who makes an erroneous application for refund shall be liable for payment of the excess refund paid plus interest at the rate in effect under section 421.7. In addition, a contractor who willfully makes a false application for refund is guilty of a simple misdemeanor and is liable for a penalty equal to fifty percent of the excess refund claimed. Excess refunds, penalties, and interest due under this subsection may be enforced and collected in the same manner as the local sales and services tax imposed under this chapter.

This provision is retroactive to July 1, 1998 and relates to purchases in fulfillment of a written contract fully executed prior to the date of the imposition of the school infrastructure sales tax. If you made purchases in an area that has imposed the school infrastructure sales tax and the above conditions apply, contact the Iowa Department of Revenue and Finance (800) 367-3388

5th Penny of Use Tax to RUTF -- Governor Vilsack signed S.F. 468, which contained a provision that fully integrates the 5th penny of use tax to the Road Fund on July 1, 1999. In 1995 we began a four-year phase-in of the 5th penny of use tax. Governor Vilsack's budget continued that commitment.

Thank You Governor Vilsack -- AGC/I has already thanked the legislators for passing these bills. We now thank Governor Vilsack for his support and approval of these measures. Join us at the Letting Reception on May 27th for your opportunity to meet and thank the Governor.

 



The Associated General Contractors of Iowa
701 East Court Avenue, Suite B -- Des Moines, IA 50309
phone: 515-283-2424 fax: 515-244-6289
email: kclark@agcia.org

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