A bill for an act relating to the sales tax exemption for the purchase of central office equipment or transmission equipment used by certain entities primarily in the furnishing of telecommunications services on a commercial basis.

HSB 126 expands Iowa's sales tax exemption to cover all purchases of central office or transmission equipment used by telecommunications companies in their commercial services, removing the prior requirement that such equipment be "primarily" used for telecom. This change directly affects local phone companies, cable operators, municipal utilities, cooperatives, and mobile service providers (like those under 47 C.F.R. §20.3) that sell telecom services. The key mechanism eliminates the word "primarily" from the exemption language, making all qualifying equipment purchases tax-free. The bill also extends this exemption to use tax, as specified in Iowa Code section 423.6.