Legislators unhappy with a state policy that means anything purchased at a bookstore owned by one of the three state universities is exempt from the state sales tax are crafting a new policy.

Their ultimate goal is to ensure any book required for a course at any public or private college or community college in Iowa may be purchased tax-free. However, all the other merchandise in a bookstore owned by a state university would be subject to the state sales tax.

Charging the sales tax on things like t-shirts, bumper stickers and laptops sold in bookstores on the Iowa City, Ames and Cedar Falls campuses would be a welcome equalizer according to Iowa Retail Federation president Jim Henter.

“We obviously have a lot of folks — bookstores, etc. — in these areas where we are competing, you know, head-to-head…and have that sales tax discrepancy,” Henter said.

The owner of Iowa Book and Supply in Iowa City wrote legislators a letter. He said his family’s 80-year-old business has laid off staff and may have to lease part of the store or close altogether because professors are telling University of Iowa students they can save seven percent on the price of their textbooks by going to the university-owned bookstore.

Keith Sanders, a lobbyist for the University of Iowa, said the university bookstores in Iowa City, Ames and Cedar Falls aren’t charging the state sales tax on merchandise today because that’s what officials in the Iowa Department of Revenue advised them to do.

“We are complying with the way the sales tax law is currently written,” Sanders said. “If the legislature so chooses to change the law, we’d happily comply with that as well.”

A three-member House subcommittee has agreed Iowa college students shouldn’t be charged sales tax on the books their professors require for class, but they plan to craft bill that would require sales tax be charged on all the other merchandise sold in the bookstores owned by the state universities. Representative Bobby Kaufmann, a Republican from Wilton, said that would level the playing field.

“I think there’s a clear inequity that a private book sales person is starting off with an automatic six-percent sales (tax) disadvantage over the governmental entity,” Kaufmann said.

Kaufmann and the other two legislators on the subcommittee indicated it would be easy to develop an electronic list of books required for courses at every public or private college or university in the state, as well as the community colleges. That list would then be used by any retailer to confirm the sales tax would not be charged on a book sale.