Measure aims to exempt private businesses from textbook sales tax

A new measure, which has bipartisan support in the State House, aims to exempt third-party, non-university owned businesses from textbook sales tax.

Tate Hildyard

Photo illustration by Tate Hildyard/ The Daily Iowan.

Charles Peckman, News Reporter

Private booksellers and lawmakers are pushing legislation that would eliminate sales tax from all required instructional materials at Iowa’s postsecondary institutions.

At the University of Iowa, administrators decided to stop collecting sales tax from Hawk Shop sales in 2017. This decision came after UI Student Government passed a resolution calling for tax exemptions on course materials.

But private booksellers, such as Iowa Book textbook manager Virgil “Scooter” Hare, said the bill’s language should include tax exemption for textbooks regardless of where they are sold.

“It seems like this time around, there is more momentum behind the tax-exemption bill,” he said. “The difference, I think, is in the specific language the bill uses. I think that sales in academic and nonacademic bookstores should be viewed equally.”

Hare said he is frustrated with the Hawk Shop’s tax exemption when privately owned businesses are losing customers because of the “monopoly” university-owned stores seem to have, he said.

At other regent universities, he said, Iowa State University only has one store that handles textbook sales. He also said the Hawk Shop attempted to eliminate sales tax in the 1990s but only recently found the specific language in state law that allows it to sell products tax-free.

“I just want there to be a level playing field,” he said.

This “level playing field” is a belief Rep. Dave Jacoby, D-Coralville, echoed. He said he has seen firsthand the cost of textbooks because he has two daughters in college.

“First of all, I think required materials should be tax-free anyway,” he said. “Should a university be competing with businesses? Well, competition is good, but stores’ textbooks should be tax-exempt as well. It levels the playing field, and that’s the way it should be.” 

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Jacoby was the only Democrat on the three-person House ways and means subcommittee that advanced the measure on Feb. 6.

Last year, lawmakers introduced a similar measure eliminating sales tax regardless of vendor. Although this measure passed 23-0 in the House Ways and Means Committee, it stalled in the Senate.

Jacoby said he hopes the measure is implemented, and he believes its bipartisan support is a good sign.

Jacob Bossman, R-Sioux City, the vice chair of the House Ways and Means Committee, said the bill, to his understanding, allocates tax exemption to bookstores selling textbooks in college towns. He said the proposed measure is a step in the right direction.

“Well, I think this means when it comes down to it, legislators wish to solve problems,” Bossman said. “I’m working on a number of issues like that right now. Partisan issues are the ones that are usually focused on in the media, but many of the issues brought to us are from our constituents.”

UI and regents’ communications specialists declined to comment on the measure’s implications for university-owned bookstores.

“The Board of Regents hasn’t taken an official position on the bill and is monitoring it,” regent spokesman Josh Lehman said.