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HF 1019

A bill for an act exempting the sale of toilet paper from the sales tax.

2025-2026 Regular Session

The bill would exempt toilet paper from Iowa sales and use taxes, removing tax at purchase for households and businesses.

Subcommittee: Dawson, Bisignano, and Rowley.
#householdgoods #salestaxes #taxexemptions
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WeVote Research Nonpartisan
Bill Summary · HF 1019

HF 1019 — Toilet Paper Sales Tax Exemption

A summary of House File 1019, which would exempt the sale of toilet paper from Iowa’s sales and use tax.

Purpose and intent

  • The bill would exempt the sale of toilet paper from the state sales tax, making toilet paper non-taxable at the point of sale.
  • Exemption applies to both the sales tax and, by operation of law, the corresponding use tax (per Code sections 423.6 and 423.5).

Key provisions

  • Amends Section 423.3 to add a new subsection explicitly exempting toilet paper from taxation.
  • The exemption covers only the sale price of toilet paper; purchases by households and businesses would be treated as non-taxable.
  • Administrative note: expenditures exempt from sales tax are also exempt from use tax.

Fiscal impact (as reported in the Fiscal Note)

  • Effective date: July 1, 2025 (Fiscal Year 2026).
  • Overall revenue impact: estimated reductions in General Fund, SAVE Fund, and Local Option Sales Tax (LOST) distributions.
    • General Fund: approximately -$6.0 million in FY2026, gradually rising to -$6.5 million by FY2030.
    • SAVE Fund: approximately -$1.2 million in FY2026 and FY2027, about -$1.3 million annually from FY2028 onward.
    • LOST distributions: approximately -$1.2 million in FY2026–FY2027, about -$1.3 million in FY2030.
  • Assumptions underlying the estimate:
    • Iowa population is 0.96% of U.S. population; toilet paper purchases per household and per capita are consistent with national averages.
    • Business toilet paper expenditures are assumed to be 50% of household expenditures.
    • Iowa toilet paper prices are 88.8% of the national average.
    • Purchases grow at 2.0% annually.
    • SAVE refunds are 1.0% of taxable expenditures; LOST distributions are 0.97% of taxable expenditures.

Who would be affected

  • Households and businesses purchasing toilet paper in Iowa would benefit from not paying sales tax on toilet paper purchases.
  • State and local revenue streams (General Fund, SAVE Fund, and LOST distributions) would experience these projected reductions.

Procedural status and timeline

  • Introduced: April 17, 2025.
  • Subcommittee: Dawson, Bisignano, and Rowley (date: April 28, 2025).
  • Fiscal note: April 23, 2025.
  • House action: Passed House on April 23, 2025 (yea 82, nay 11); first reading and referral to Ways and Means also occurred on April 23.
  • Additional notes: The bill includes an immediate message and House communication dated April 23.

Overview of the legislative content (capstone)

  • The central policy change is straightforward: remove toilet paper from the list of taxable goods in Iowa, with the exemption applying to both sales and use taxes per the state code framework. The fiscal note estimates a multi-year revenue impact across state and local funds, based on specific demographic and spending assumptions.

Compiled from official sources — confirm details with the bill’s official record.

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