This bill amends Section 423.3, subsection 47A, paragraph a of the Iowa Code to expand the sales tax exemption for the purchase of central office equipment and transmission equipment used by various entities in the telecommunications sector. The amendment removes the term "primarily," thereby making all purchases of such equipment by local exchange carriers, competitive local exchange service providers, franchised cable television operators, mutual companies, municipal utilities, cooperatives, and other companies providing communications services exempt from sales tax, regardless of the extent to which they are used in furnishing telecommunications services on a commercial basis.

Additionally, the bill clarifies that the exemption applies to long-distance companies and commercial mobile radio services as defined in federal regulations. By removing the limitation implied by the term "primarily," the bill aims to broaden the scope of the sales tax exemption, ensuring that all relevant purchases are treated equally under the law. This change also implies that items exempt from sales tax will similarly be exempt from the use tax, as outlined in Code section 423.6.

Statutes affected:
Introduced: 423.3