Water Service Excise Tax (WET)

The Iowa Department of Revenue passed SF512 during the recent legislative session, a Water Service Excise Tax, effective July 1, 2018.

Before the enactment of this law, the sale of water was subject to the 6% state sales tax as well as any applicable local option sales tax (LOST), which is 1% in Moravia.  The new law will exempt the sale of water service from state sales tax, but impose a 6% special excise tax instead.  This is not an additional tax or an increase in taxes — the excise tax just takes the place of sales tax and is at the same 6% rate.  In fact, Moravia water customers will see a 1% decrease in their bills because of the elimination of the local option sales tax (LOST) charged on water services.

If you have any questions on this change, please contact Moravia City Hall at (641) 724-9811.