Iowa Association of Electric Cooperatives

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

March 23, 2022

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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. “Our advocacy day on the hill is an important opportunity to personally touch base with our elected officials and share a local perspective on issues that impact rural Iowa and rural economic development,” remarked Roger Solomonson, board president of IAEC. 

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. 

Advocates 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.

About IAEC
Owned by the member-consumers we serve, Iowa’s not-for-profit lectric cooperatives power the lives of 650,000 Iowans throughout all 99 counties and are committed to delivering power that is safe, reliable, affordable and environmentally responsible. Built by the communities we serve, Iowa’s electric co-ops have also invested heavily in local economic development for decades.

The Iowa Association of Electric Cooperatives is a trade association established to support the interests of member-owned electric cooperatives, including 39 local distribution co-ops and nine generation and transmission co-ops. Formed in 1942, IAEC aims to unify and empower Iowa’s electric cooperatives through legislative representation, regulatory oversight, training and education services, safety programs, communications support and advocacy. Learn more at www.iowarec.org. 

For More Information:

Erin Campbell, IAEC Director of Communications

ecampbell@iowarec.org

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