Iowa may expand August sales tax holiday

A bill making its way through the Iowa Legislature seeks to broaden the state’s annual sales tax holiday to include emergency preparedness supplies. It would also lengthen the tax-free period by one day.

Neither proposal is unusual. Alabama and Texas currently provide a sales tax holiday for emergency or severe weather preparedness, and most sales tax holidays typically last at least a full weekend, if not longer.

An exemption for emergency preparedness supplies

Iowa’s sales tax holiday currently provides an exemption for select clothing and footwear with a sales price less than $100.

Under House File 2563, the temporary sales and use tax exemption would also apply to certain emergency preparedness supplies with a sales price of less than $100. “‘Emergency prepared supplies’ means a collection of basic household items purchased by individuals or families for use in the event of an emergency.” This includes, but isn’t limited to:

  • Artificial ice packs
  • Batteries
  • Bottled water
  • Bungee cords
  • Carbon monoxide detectors
  • Duct tape
  • Fire extinguishers
  • First aid kids
  • Ground anchor systems
  • Nonelectric food storage containers
  • Water storage containers

Though the price restriction for most items is less than $100, Iowa would also provide a temporary exemption to the following items as long as their sales price doesn’t exceed $5,000:

  • Inverters
  • Portable generators
  • Tie-down kits
  • Transfer switches

Each household may only purchase one qualifying generator per household per sales tax holiday period. There are no limitations on other purchases, aside from the price caps.

One more day to buy and sell tax-free goods

The annual sales tax holiday currently begins at 12:01 a.m. on the first Friday in August and concludes the following Saturday at midnight. Under HF 2563, the tax-free period would conclude at midnight the following Sunday.

See more details about 2022 sales tax holidays.

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