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SF 200

A bill for an act relating to the distribution of water exempt from taxation and the use of tax exemption certificates, and providing civil penalties.

2025-2026 Regular Session Introduced by Amy Sinclair

SF 200 simplifies tax exemptions for water usage, requiring utilities to accept exemption certificates, benefiting users and reducing administrative burdens.

Subcommittee: Schultz, Driscoll, and Townsend.
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Bill Summary · SF 200

Summary of SF 200: Tax Exemption for Water Distribution

Bill Number: SF 200
Introduced On: February 4, 2025
Current Status: Subcommittee: Schultz, Driscoll, and Townsend
Classification: Bill
Subjects: Farming, Revenue Department, Sales Taxes, Tax Exemptions, Taxation, Utilities, Water, Water Utilities

Purpose and Intent

The primary purpose of SF 200 is to streamline the process for water utilities in accepting tax exemption certificates for water usage. This bill aims to ensure that individuals or entities using water that is exempt from taxation can easily access this exemption without unnecessary bureaucratic hurdles.

Key Provisions

  1. Definition of Terms:

    • Exemption Certificate: A valid certificate that exempts all or part of a person's water use from sales tax as imposed under chapters 423 or 423G.
    • Water Utility: Defined as a public utility as per section 476.1, subsection 2, paragraph “c”.

  2. Acceptance of Exemption Certificates:

    • Water utilities are required to accept and retain valid exemption certificates presented by users.
    • Utilities cannot compel users to seek a tax refund from the Department of Revenue instead of honoring the exemption certificate.

  3. Penalties for Non-Compliance:

    • If a water utility fails to accept a valid exemption certificate, it will incur a civil penalty equal to the amount of tax refunded to the user, plus interest at the rate specified in section 421.7.
    • Collected penalties and interest will be deposited into the state’s general fund.

  4. Rule Adoption:

    • The Department of Revenue is tasked with adopting rules to administer the provisions of this section effectively.

Impact

  • Who is Affected:

    • Water utilities will need to adjust their practices to comply with the new requirements.
    • Users of water services who qualify for tax exemptions will benefit from a more straightforward process in obtaining these exemptions.

  • Financial Implications:

    • The bill could potentially reduce the administrative burden on both water utilities and the Department of Revenue by minimizing the need for tax refunds.
    • The penalties imposed on non-compliant utilities could generate additional revenue for the state’s general fund.

Procedural Timeline

  • February 4, 2025: Bill introduced and referred to the Ways and Means Committee.
  • February 11, 2025: Assigned to the subcommittee consisting of Schultz, Driscoll, and Townsend for further consideration.

This summary provides an overview of SF 200, highlighting its objectives, key provisions, and the anticipated impact on stakeholders involved in water distribution and taxation.

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

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