A bill for an act making a rural water district a designated exempt entity for purposes of the sales and use tax.

HSB 226 designates rural water districts, organized under specific state chapters, as exempt entities for sales and use tax purposes. This allows these districts to apply for refunds of sales and use tax paid on building materials, supplies, equipment, and services provided by contractors for written contracts. A key change is that construction services furnished to the water district also become exempt from sales tax. To avoid overlapping provisions, the bill removes a current sales tax exemption that applies only to building materials sold to rural water districts.