However, that revised set of WET rules still negatively affected Iowa manufactured housing communities who own or operate their own wells, but do not separately bill or otherwise charge their residents for water; these revised rules mandated that such communities are subject to WET. Accordingly, attorney Jodie McDougal was further retained by two Davis Brown clients to continue to press this issue with the IDOR, and, to that end, submitted a letter of objection to the IDOR dated September 7, 2018 setting forth further objections to the WET rules.

The IDOR has, once again, listened to the concerns and objections from the industry and responded in a positive manner for the industry. On September 24, 2018, the IDOR submitted a second set of revised proposed rules. This second set of revised rules, specifically at proposed rule 97.5(3), provide, in short, that manufactured housing communities who own or operate their own wells, but do not separately bill or otherwise charge their residents for water are not covered by WET. This is another great victory for manufactured housing communities on this issue.

In sum, under the currently proposed version of the IDOR’s WET rules, manufactured housing communities who:

• do not charge their residents a flat water fee,
• do not charge their residents for water based upon their actual water usage, and
• do not offer comparable lots/units at a lower price that do not have access to water service

are not deemed to be furnishing water for compensation and are, thus, not subject to WET, regardless of whether the manufactured housing community purchases its water from a water utility or has its own water well.

Please note that these rules are a preliminary version of the second set of revised rules and more changes may be coming to these rules, of which I will notify you.

Further updates will be provided later this year.

Finally, in the event you now need to cancel your WET Permit due to the change in the WET rules, you can do so at: https://www.idr.iowa.gov/ChangeForm/start.asp.

Alternatively, you can fill out this form and return it to the Department at the address listed: https://tax.iowa.gov/sites/files/idr/forms1/IowaBusinessTaxChange%2892033%29.pdf

Previous information regarding WET:

What Landlords Need to Know about Iowa's New Water Service Excise Tax - June 27, 2018

New Information RE: WET Itemization and Billing for Manufactured Housing Communities - July 26, 2018

Iowa Department of Revenue Announces Re-Write of Water Excise Tax Rules for Manufactured Housing Community - August 15, 2018

Iowa Department of Revenue Distributes Draft Version of Revised Proposed Rules on the Water Excise Tax Rules for Manufactured Housing Community - August 22, 2018