Another utility tax break plan passes the Legislature

You may have tax-free utility bills by 2006.The Iowa Senate has voted to gradually erase the five-percent state sales tax charged on electricity, natural gas, heating oil and propane. Senator Larry McKibben, a republican from Marshalltown, says by 2006, it’ll save Iowans 80-million dollars in utility taxes.Some Senators, like Mike Gronstal of Council Bluffs, argued for immediately erasing the sales tax this year rather than phasing it out over five years.Republicans in the Senate are pitted against the G-O-P in the Iowa House on this issue, as House Republicans voted down the sales tax phase out Wednesday. House Speaker Brent Siegrist, a republican from Council Bluffs, says if they change their minds, they’ll explain it to Iowans. The bill passed by the Senate erases the five percent sales tax on February and March bills this year, then begins the phase-out in January, 2002 with the tax going down to four percent. In 2003, the tax is three percent; in 2004, two percent; in 2005, one percent and it’s gone in 2006.