Iowa Administrative Code › Agency 701 - Revenue Department › Title III - Sales, Use, and Excise Tax › Chapter 284 - Exempt Sales › Rule 701-284.38 - State Sales Tax Phase-out on Energies

Current through Register Vol. 47, No. 3, July 24, 2024
Beginning January 1, 2002, the state sales tax is phased out
				  at the rate of 1 percent per year on the gross receipts from the sale,
				  furnishing, or service of metered natural gas, electricity and fuels, including
				  propane and heating oils, to residential customers for use as energy for
				  residential dwellings, apartment units, and condominiums for human
				  occupancy.
Local option taxes are not included in the phase-out of the
				  state sales tax.
This phase-out of tax does not impact franchise fees.
				  Franchise fees will continue to be imposed where applicable.
(1)
Definitions.
The
				following definitions are applicable to this rule:
"Energy"
means a substance that generates
				  power to operate fixtures or appliances within a residential dwelling or that
				  creates heat or cooling within a residential dwelling.
"Fuel"
means a liquid source of energy for a
				  residential dwelling, individual apartment unit, or condominium. "Fuel"
				  includes propane, heating fuel, and kerosene. However, "fuel" does not include
				  blended kerosene used as motor fuel or special fuel.
"Metered gas"
means natural gas that is
				  billed based on metered usage to provide energy to a residential dwelling,
				  individual apartment unit, or individual condominium.
"Residential dwelling"
means a structure
				  used exclusively for human occupancy. This does not include commercial or
				  agricultural structures, nor does it include nonresidential buildings attached
				  to or detached from a residential dwelling, such as an outbuilding. However, a
				  garage attached to or detached from a residential dwelling and that is used
				  strictly for residential purposes will fall within the phase-out provisions. A
				  building containing apartment units is not considered to be qualifying property
				  for purposes of this rule. However, if each apartment has a separate meter, it
				  may qualify for the phase-out if classified as qualifying property by the
				  utility. Also excluded from the phase-out provisions are certain nonqualifying
				  properties that include, but are not limited to, nursing homes, adult living
				  facilities, assisted living facilities, halfway houses, charitable residential
				  facilities, YMCA residential facilities, YWCA residential facilities, apartment
				  units not individually metered, and group homes.
(2)
Schedule for phase-out of
				tax.
State sales tax will be phased out at the rate of 1 percent per
				year based on the following schedule:
a. If
				the date of the utility billing or meter reading cycle of the residential
				customer for the sale, furnishing, or service of metered gas and electricity is
				on or after January 1, 2002, through December 31, 2002, or if the sale,
				furnishing, or service of fuel for purposes of residential energy and the
				delivery of the fuel occur on or after January 1, 2002, through December 31,
				2002, the rate of state tax is 4 percent of the gross receipts.
b. If the date of the utility billing or
				meter reading cycle of the residential customer for the sale, furnishing, or
				service of metered gas and electricity is on or after January 1, 2003, through
				December 31, 2003, or if the sale, furnishing, or service of fuel for purposes
				of residential energy and the delivery of the fuel occur on or after January 1,
				2003, through December 31, 2003, the rate of state tax is 3 percent of the
				gross receipts.
c. If the date of
				the utility billing or meter reading cycle of the residential customer for the
				sale, furnishing, or service of metered gas and electricity is on or after
				January 1, 2004, through December 31, 2004, or if the sale, furnishing, or
				service of fuel for purposes of residential energy and the delivery of the fuel
				occur on or after January 1, 2004, through December 31, 2004, the rate of state
				tax is 2 percent of the gross receipts.
d. If the date of the utility billing or
				meter reading cycle of the residential customer for the sale, furnishing, or
				service of metered gas and electricity is on or after January 1, 2005, through
				December 31, 2005, or if the sale, furnishing, or service of fuel for purposes
				of residential energy and the delivery of the fuel occur on or after January 1,
				2005, through December 31, 2005, the rate of state tax is 1 percent of the
				gross receipts.
e. If the date of
				the utility billing or meter reading cycle of the residential customer for the
				sale, furnishing, or service of metered gas and electricity is on or after
				January 1, 2006, or if the sale, furnishing, or service of fuel for purposes of
				residential energy and the delivery of the fuel occur on or after January 1,
				2006, the rate of state tax is 0 percent of the gross receipts.