Emergency preparedness supplies may become part of Iowa’s annual sales tax holiday
(The Center Square) – Iowans could add emergency preparedness supplies to their shopping lists for the state’s annual sales tax holiday if a new bill passes.
The Iowa Emergency Management Association asked Iowa legislators to consider extending the sales tax holiday to include basic supplies that are needed in disaster situations, according to a statement emailed to The Center Square. The two-day sales tax holiday runs from midnight on the first Friday of August to midnight on the following Saturday.
“In the case of a disaster these supplies could drastically reduce the recovery time for those affected while decreasing the cost to taxpayers,” The Iowa Emergency Management Association stated in a fact sheet sent to The Center Square. “If most Iowans already have these emergency supplies on hand during a disaster, it allows all members of the public safety community to focus their limited resources on life safety.”
The bill, HF 680, was discussed Feb. 25 in a Ways and Means subcommittee of the House of Representatives after Rep. Jon Thorup, R-Knoxville, introduced it Feb. 24.
Iowa’s state sales tax rate is 6% and local option sales tax rates are typically 1%, according to the Iowa Department of Revenue. Purchases would not be subject to either tax rate during the vacation.
According to the bill, supplies eligible for the tax exemption would include portable radios, tarps and plastic drop cloths, fire extinguishers, first aid kits, emergency ladders, batteries, artificial ice and packs, ropes, smoke detectors, and bottled water, as long as they have a retail price lower than $100. Tie-down kits, portable generators, transfer switches and inverters, of any cost, would be eligible as well.
Items that are currently exempt during the holiday include diapers, aerobic clothing, lingerie and underwear, suits, running shoes without cleats, hats, gloves, coats and costumes, according to the Iowa Administrative Code. Rental of clothing or footwear, clothing that is primarily designed and worn solely for athletic activity, and items used to repair clothing are not included in the sales tax holiday.
All businesses that are open on these days are required to participate, and items purchased through online and mail order shopping also qualify, if goods are ordered and paid for during the sales tax vacation, according to the Iowa Department of Revenue.
“While a sales tax holiday may only be 2-3 days (depending on the state) in length, it incentivizes consumers who either have a need for the item or feel persuaded to purchase knowing they can reap the benefits of purchasing the items tax-free,” Sales Tax Institute Tax Manager Trisha Davidson told The Center Square in an emailed statement.
“Consumers can benefit from paying less than expected considering the tax rate in states could range from 4-10% depending on the state and locality. Businesses are impacted with increased sales during the sales tax holiday and should ensure their systems are prepared for proper administration of the sales tax holiday and subsequent tax reporting.”
Virginia, Texas, Florida and Alabama include emergency preparedness items in their sales tax vacation holidays, according to the Sales Tax Institute.
“Increasing the types of items for a sales tax holiday offers more opportunity for purchasing the qualifying items without paying the sales tax. A consumer looking to save state and/or local option sales tax, for example, should consider taking advantage of the limited-time sales tax holiday and making the purchase according to the specifications of the holiday,” Davidson said. “Big ticket items are generally popular purchases during sales tax holidays, and consumers should be aware of their state’s guidelines on any limitations such as the purchase price of the item.”
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