Eligible Iowa water trail nonprofits would qualify for tax breaks

Eligible nonprofits would qualify for sales and use tax exemptions and could ask the Iowa Department of Revenue for refunds of taxes on contractor purchases. Eligible Iowa nonprofit corporations must build infrastructure on land and within rivers and watersheds for a regional water trail system. Direct exemptions would cover goods, specified digital products, and services sold to them. Local government bodies must appoint a majority of the nonprofit's voting board members. The nonprofit must carry out a regional recreation and dam safety plan. Construction refunds would cover materials, supplies, equipment, and services provided by a contractor under a written contract with the nonprofit. If enacted, the bill would take effect immediately. The tax provisions would cover eligible purchases and services supplied to these nonprofits or their construction contractors on or after January 1, 2025.

Construction purchases under a written contract with an eligible tax-exempt entity would qualify even when another eligible entity ultimately owns the project. This provision would cover written construction contracts with public bodies or organizations eligible for the designated construction tax exemption. Covered materials, supplies, equipment, or services must be completely consumed—used up—in carrying out the written construction contract. The finished project must become public property or property owned by an eligible tax-exempt entity. The ownership provision would take effect upon enactment.