Fiscal Note
Fiscal Services Division
HF 681 – Sales Tax Refunds, County and District Fairs (LSB1774HV.3)
Staff Contact: Evan Johnson (515.281.6301) evan.johnson@legis.iowa.gov
Fiscal Note Version – Final Action
Description
House File 681 exempts from the State sales and use tax the price of tangible personal
property, specified digital products, or services sold to a county or district fair. The Bill makes
county and district fairs designated exempt entities.
Background
A fair, as defined under Iowa Code chapter 174, means an organization that is incorporated
under the laws of this State, including as a county or district fair or as an agricultural society, for
the purpose of conducting a fair event, if all of the following apply:
• The organization owns or leases at least 10 acres of fairgrounds.
• The organization owns buildings or other improvements situated on the fairgrounds that
have been specially constructed for the purposes of conducting a fair event.
• The market value of the fairgrounds and buildings and other improvements located on the
fairgrounds is at least $25,000.
There are 106 county and district fairs in Iowa.
Assumptions
• The average cost to operate a fair in Iowa is approximately $540,000 annually. One-quarter
of this cost, or $135,000, is for items subject to sales/use tax upon purchase. Across all 106
fairs, total annual costs subject to sales/use tax are estimated to be approximately
$14.3 million.
• Construction costs are not included in operating costs.
• According to the Association of Iowa Fairs 2023 Exhibitor Summary and Statistics Report,
there were approximately $8.6 million in capital improvements across Iowa county fairs in
2023. It is assumed that 50.0% of capital improvement costs are labor costs, which are not
subject to sales/use tax.
• Total taxable expenditures by county fairs that will be exempt under the Bill are estimated to
be approximately $18.6 million in FY 2023.
• Growth trends in future fiscal years are based on Consumer Price Index estimated increases
of 2.0% from FY 2025 to FY 2029.
• Secure an Advanced Vision for Education (SAVE) refunds are 1.0% of taxable expenditures.
Local options sales tax (LOST) distributions are estimated to be 0.97% of taxable
expenditures.
Fiscal Impact
House File 681 is estimated to reduce revenues to the General Fund, SAVE Fund, and LOST
by the amounts in Figure 1.
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 Figure 1 — Fiscal Impact of HF 681 (in Millions)
General Fund SAVE LOST
FY 2025 $ -1.0 $ -0.2 $ -0.2
FY 2026 -1.0 -0.2 -0.2
FY 2027 -1.0 -0.2 -0.2
FY 2028 -1.0 -0.2 -0.2
FY 2029 -1.0 -0.2 -0.2
Sources
Iowa Department of Revenue
Association of Iowa Fairs 2023 Exhibitor Summary and Statistics Report
Legislative Services Agency analysis and calculations
/s/ Jennifer Acton
April 26, 2024
Doc ID 1449812
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:
Enrolled: 423.3