Fiscal Note
Fiscal Services Division
SF 604 – Sales Tax Holiday, Emergency Preparedness Supplies (LSB1972SV)
Staff Contact: Lora Vargason (515.725.2249) lora.vargason@legis.iowa.gov
Fiscal Note Version – New
Description
Senate File 604 expands the Iowa sales tax holiday to include emergency preparedness
supplies. An exception to the selling price limit of $100 per item is provided for tie down kits,
portable generators, transfer switches, and inverters.
Background
The State currently has an annual sales tax holiday held on the first Friday and Saturday of
August. During this period, clothing and footwear that meet certain criteria are exempt from
sales tax and local option sales tax. The exemption does not apply to any item selling for $100
or more. The Department of Revenue estimates for the amount of sales tax exempted in recent
years during the sales tax holiday are listed below:
• FY 2018 = $4.1 million
• FY 2019 = $4.4 million
• FY 2020 = $4.6 million
Alabama, Florida, Texas, and Virginia currently have a sales tax holiday for certain emergency
preparedness supplies.
Assumptions
• Current FY 2022 annual sales of emergency preparedness supplies in the State are
estimated to be $18.0 million.
• An estimated 5.0% of emergency preparedness supplies will be purchased during the sales
tax holiday. Additionally, 5.0% of purchasers will use the sales tax holiday period to
purchase higher-priced items than they would purchase without the holiday.
• States with a similar sales tax holiday or similar legislation were reviewed to determine the
estimated fiscal impact percentage based on the total sales tax revenue collected by the
state. The estimated fiscal impact percentages were in a range from 0.01% to 0.07%, with
an average of 0.05%.
• Growth trends in future fiscal years are based on Consumer Price Index Urban (CPI-U)
average estimated increases of 2.34% from FY 2022 to FY 2026.
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Fiscal Impact
Senate File 604 would reduce revenues to the General Fund, Secure an Advanced Vision for
Education (SAVE) Fund, and local option sales tax (LOST) by the estimated ranges listed
below.
Estimated Revenue Reduction of SF 604
Minimum Maximum Minimum Maximum Minimum Maximum
General Fund General Fund SAVE SAVE LOST LOST
FY 2022 $ 174,400 $ 848,500 $ 34,900 $ 169,700 $ 33,800 $ 164,600
FY 2023 178,400 868,400 35,700 173,700 34,600 168,500
FY 2024 182,600 888,700 36,500 177,700 35,400 172,400
FY 2025 186,900 909,500 37,400 181,900 36,300 176,400
FY 2026 191,300 930,800 38,300 186,200 37,100 180,600
Sources
Department of Revenue
Iowa Emergency Management Association
Arkansas Department of Finance and Administration
Florida Finance and Tax Committee
Texas Comptroller of Public Accounts
LSA analysis and calculations
/s/ Holly M. Lyons
April 23, 2021
Doc ID 1219684
The fiscal note for this Bill was prepared pursuant to Joint Rule 17 and the Iowa Code. Data used in
developing this fiscal note is available from the Fiscal Services Division of the Legislative Services
Agency upon request.
www.legis.iowa.gov
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Statutes affected:
Introduced: 423.3