You will no longer have to pay state sales tax on your utility bills in the new year. Department of Revenue and Finance spokesperson Renee Mulvey says the state legislature approved a five-year phase out of the tax in 2001. She says you will not pay the five-percent sales tax on heating fuels.
She says you may still find some taxes on your heating bill. She says you will still have to pay the local option taxes on fuel. Mulvey says legislators felt taxing the heating fuels was an undue burden. She says the legislature took a look at what’s healthy to run your home and they felt that heating your home was necessary.
Mulvey says the local option tax was left in because it’s decided by communities. Mulvey says the local option taxes are decided by a vote in the communities, so the legislature did not want to interfere with their right to do that. Mulvey says the phase-out of the tax is expected to save Iowans 100-million dollars in 2006.