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‘Water Tax’ bill advances in committee

Tap WaterBy Bob Eschliman
Editor

 

The Iowa House Ways and Means Committee has introduced a bill similar to one introduced last month in the Iowa Senate that would establish a metered water excise tax.

House Study Bill 229 exempts from the state sales tax the sales price from the sale or furnishing of metered water to residential customers for use at residential dwellings and units of apartment and condominium complexes used for human occupancy. By operation of Iowa Code 423.6, an item exempt from the imposition of the sales tax is also exempt from the use tax imposed in Iowa Code 423.5.

Last month, the Iowa Senate Ways and Means Committee introduced Senate Study Bill 1220, which would create a state excise tax on metered water for use at residential dwellings and units of apartment and condominium complexes used for human occupancy. If approved, the rate would start at 6 percent – the same as the current state sales tax – and would decrease by 1 percentage point annually over the next four fiscal years.

HSB 229 is identical to SSB 1220.

The legislation has the support of the Iowa League of Cities, the Iowa Association of Water Agencies, the Iowa Association of Municipal Utilities, and the Iowa Rural Water Association.