This bill designates nonprofit rural water districts organized under Code chapter 504, as provided in chapter 357A, as exempt entities for sales and use tax purposes. Specifically, it allows these districts to apply for refunds on sales and use tax for building materials, supplies, and equipment, as well as services provided by contractors under certain contractual conditions. This change aims to streamline the tax exemption process for rural water districts and enhance their financial efficiency in construction projects.

To implement this designation, the bill introduces a new subparagraph to Section 423.4, subsection 1, paragraph a, while simultaneously striking the existing exemption for rural water districts found in Section 423.3, subsection 38. This ensures that there is a single, clear exemption framework for rural water districts, eliminating any potential confusion that could arise from having two separate exemptions for similar transactions.

Statutes affected:
Introduced: 423.4, 423.3