What did legislation passed in 2001 addressing the taxation of energy used for residential dwellings do?
In the 2001 legislative session of the Iowa General Assembly, both HF1 and HF705 passed phasing out state sales tax on residential energy over a five-year period, but retains imposition of all local option sales tax. Effective January 1, 2002, state sales tax was reduced to four percent on residential energy. The state sales tax will be reduced by an additional one percent on January 1 each year until completely phased out. A residential dwelling means a structure used exclusively for human occupancy. For questions on whether or not property should be considered a residential dwelling , please contact the Iowa Department of Revenue and Finance (IDRF).
