Iowa’s rural electric cooperatives advocate to end rural energy tax during 2022 “REC Day on the Hill”

Nearly 200 employees and elected directors from Iowa’s locally owned rural electric cooperatives (RECs) came to the Iowa State Capitol on March 22 to advocate for important issues during the annual “REC Day on the Hill” event.

Representatives from Southwest Iowa REC joined the statewide advocacy effort.

Specifically, advocates talked to legislators about a digital sales tax inequity that Iowa’s electric cooperatives hope to resolve before the 2022 Legislative Session ends. The inequity stems from an unintentional error made in 2018 legislation that requires Iowa electric co-ops to pay a new 6% sales and use tax on digital goods and services, even though investor-owned utilities are exempt. Since the law went into effect in 2019, the IAEC estimates that Iowa electric co-ops have collectively paid $300,000 or more annually in taxes, resulting in roughly $1 million of unintentional taxes paid by rural Iowans through their energy bills.

We thanked House members for supporting legislation to fix this error through HF 2520 and encouraged senators to take up the issue. Following our advocacy event, the Senate passed SF 2372 which is a larger legislative package that addresses various policy issues, including language similar to the House File that would bring an end to this rural energy tax. Iowa’s electric co-ops deeply appreciate the work of the House and the Senate on this issue and urge them to come to an agreement about which bill to send to the Governor for her consideration to restore tax equity for co-op member-consumers throughout rural Iowa. Learn more about this issue at www.iaruralpower.org/advocacy.

Advocates also educated legislators on the benefits of the cooperative business model, including local ownership, cost-based rates and democratic governance. Additionally, several electric cooperatives displayed booths in the rotunda which provided information on topics including economic development, electric vehicles, digital metering advancements, investments in technology, lineman safety innovations and vegetation management work.

Pictured left to right: Eric Hensley, SWIAREC Member Service Tech.; Justin Murphy, SWIAREC Line Superintendent; Senator Tom Shipley; Deena Moore, SWIAREC Board Member; Duane Schaffer, SWIAREC Operations Manager