Iowa Administrative Code › Agency 701 - Revenue Department › Title III - Sales, Use, and Excise Tax › Chapter 215 - Exemptions Primarily Benefiting Manufacturers and Other Persons Engaged in Processing › Rule 701-215.10 - Exclusive Web Search Portal Business and Its Exemption

Current through Register Vol. 47, No. 3, July 24, 2024
A business that qualifies as a web search portal business
				  that has a physical location in Iowa and that meets specific criteria may
				  obtain an exemption from sales and use tax on specific purchases that are used
				  in the operation and maintenance of the web search portal business. This
				  exemption from sales and use tax also applies to the affiliates of a qualifying
				  web search portal business.
(1)
Definitions.
For the purpose of this exemption, "affiliate,"
				"control," and "web search portal business" mean the same as defined in Iowa
				Code section 423.3(92)
"e."
(2)
Claiming the exemption.
Iowa Code section
				423.3(92)
"b"
provides the criteria to claim this exemption. If a
				business fails to meet the investment qualification found in Iowa Code section
				423.3(92)
"d,"
the web search portal business loses the right to claim
				the exemption and the business is required to pay all sales or use taxes that
				would have been due on the purchase or rental of all purchases previously
				claimed exempt from sales and use tax, plus any and all applicable statutory
				penalty and interest due on the tax.
(3)
Exempt purchases.
Sales
				and leases of the following are exempt from sales and use tax when sold or
				leased to a qualifying web search portal business:
a. Computers and equipment that are necessary
				for the maintenance and operation of the web search portal business;
b. All equipment used for the operation and
				maintenance of the cooling system for the computers and equipment used in the
				operation of the web search portal;
c. All equipment used for the operation and
				maintenance of the cooling towers for the cooling system referenced in
				paragraph 215.10(3)
"b"
;
d. All equipment used for the operation and
				maintenance of the temperature control infrastructure for the computers and
				equipment used in the operation of the web search portal;
e. All equipment used for the operation and
				maintenance of the power infrastructure that is used for the transformation,
				distribution, or management of electricity used for the operation and
				maintenance of the web search portal. This equipment includes, but is not
				limited to, exterior dedicated business-owned power substations, backup power
				generation systems, battery systems, and related infrastructure;
f. All equipment used in the racking system,
				including cabling and trays;
g.
				Fuel purchased by the web search portal business that is used in the backup
				power generation system and in all items listed in paragraphs
				215.10(3)
"a"
through
"f."
This provision
				includes the fuel used in backup generators that may be located outside of the
				building that are used if power is interrupted to ensure the web search portal
				continues operation; and
h.
				Electricity purchased for use in operating the web search portal.