Fiscal Note
Fiscal Services Division
HF 2563 – Sales Tax Exemption, Emergency Goods (LSB5516HV)
Staff Contact: Lora Vargason (515.725.2249) lora.vargason@legis.iowa.gov
Fiscal Note Version – New
Description
House File 2563 expands the Iowa sales tax holiday to include emergency preparedness
supplies. The Bill provides an exception to the sales price limit of less than $100 per item for
tie-down kits, portable generators, transfer switches, and inverters, for which the maximum
allowed sales price is increased to $5,000. The Bill also expands the existing sales tax holiday
by one additional day to include Sunday.
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 (LOST). The exemption does not apply to any item selling
for $100 or more. The Department of Revenue estimates the amount of sales tax exempted in
FY 2023 during the current sales tax holiday will be $4.7 million.
Alabama and Texas 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 $18.3 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.
• Growth trends in future fiscal years are based on Consumer Price Index Urban (CPI-U)
average estimated increases of 2.0% from FY 2023 to FY 2028.
• As a result of the number of days in the current sales tax holiday increasing from two to
three, the estimated fiscal impact will increase proportionally by 50.0% to account for the
additional day of exempted sales.
Fiscal Impact
House File 2563 would reduce revenues to the General Fund, Secure an Advanced Vision for
Education (SAVE) Fund, and LOST by the estimated amounts listed below.
1
 Fiscal Impact of Exemption for Emergency
Preparedness Supplies Purchases and Expansion of
Sales Tax Holiday
In Millions
General Fund SAVE LOST
FY 2023 $ -2.6 $ -0.5 $ -0.5
FY 2024 -2.7 -0.5 -0.5
FY 2025 -2.7 -0.5 -0.5
FY 2026 -2.8 -0.6 -0.5
FY 2027 -2.8 -0.6 -0.6
FY 2028 -2.9 -0.6 -0.6
Sources
Department of Revenue
Iowa Emergency Management Association
LSA analysis and calculations
/s/ Holly M. Lyons
March 22, 2022
Doc ID 1288725
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