This bill designates nonprofit rural water districts organized under Code chapter 504, as provided in Code chapter 357A, as exempt entities for sales and use tax purposes. Specifically, it allows these districts to apply for refunds on sales 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, which explicitly includes rural water districts as exempt entities. Additionally, it removes the existing sales tax exemption for rural water districts found in Section 423.3, subsection 38, to prevent overlapping exemptions. This ensures that there is a single, clear exemption framework for rural water districts regarding sales tax on construction-related purchases and services.

Statutes affected:
Introduced: 423.4, 423.3