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 or 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 ensures that all relevant purchases are exempt from sales tax, which also extends to the use tax as per Code section 423.6. This legislative change aims to support the telecommunications industry by reducing the tax burden associated with essential equipment purchases.

Statutes affected:
Introduced: 423.3