Temporary Sales Tax Permit FAQs

To obtain a temporary permit, call 515-725-0259.

 

Frequently Asked Questions

1. Am I a sponsor, vendor, or exhibitor?

For more information, see Sales Tax and Special Events - Temporary Permits

2. What's taxable? Is food taxable?

The taxation of food can be a difficult subject to understand. See Iowa Sales Tax on Food for details.

3. I paid tax when I bought materials to make crafts. How do I take a credit for paying this tax?

You may ask for a refund on the form IA 843 Claim for Refund (pdf).

You may want to consider applying for a permanent sales tax permit and use the resale exemption with your permit number for future purchases. This exemption can be claimed by providing an Iowa Sales Tax Exemption Certificate (pdf) to your supplier.

Remember this applies only to items purchased for resale or to be incorporated into another product for resale. A credit or refund is not allowed for sales tax paid on items that were purchased for your own use, even though they may be sold at some time in the future. Sales tax must still be collected when goods are sold at events even though tax may have been paid on them when they were originally purchased.

4. My organization is tax exempt. Do we have to collect sales tax?

Sales made by entities or organizations engaged in educational, religious, or charitable activities are exempt if they meet the following requirements:

An exemption from sales tax is allowed to the extent net proceeds are expended for qualifying educational, religious, or charitable purposes.

NOTE: Most nonprofit organizations are not exempt from sales tax on their purchases.

For additional information, please see Iowa Tax Issues for Nonprofit Entities.

5. Why do I have to pay sales tax?

All merchants or vendors are required by law to collect and remit appropriate sales tax, even if it is a small amount. The customer pays the tax that you collect and send to the State.

6. How much sales tax must I collect?

Iowa's state sales/use tax rate is 6%. Many cities and counties also have a 1% local option tax.

7. Where do I get a sales tax rate chart?

You may obtain one online or call 515-281-7239 and ask that one be mailed to you.

8. I have an Iowa Sales Tax Permit. Am I required to file a temporary return?

No. Please provide the sponsor with your active Iowa Sales Tax Permit number and he or she will provide it to us on your behalf. If you receive correspondence from the Department after the event is over, you will need to provide the sales tax number at that time as well.

9. Am I required to mail the tax return even if I had no sales?

Yes, if you have attended a temporary event you must respond that you had $0 sales. If you have a permanent sales tax permit and had no sales for your filing period, you must file your return with $0 sales.

10. I want to sponsor a craft show. What are my responsibilities and how do I accomplish them?

Sponsors of flea markets, craft shows, antique shows, and other temporary events must verify that the exhibitors are licensed to collect sales tax. Sponsors must obtain an Iowa sales tax permit number or a good faith statement from each vendor. Sponsors may be responsible for sales tax that is not collected by the vendors, if the vendor information is not obtained.

11. Who do I contact for a temporary sales tax permit?

Exhibitors and vendors may obtain temporary permits if they are not in business regularly. To obtain a temporary permit, call 515-725-0259.

12. My company collects the tax from me. How do I handle this?

Some companies collect the sales tax from their sales representatives and remit it to the state on their behalf. Your company will be able to provide you with the sales tax number used to remit sales tax to Iowa. Please provide that number to us.

13. Are admission charges and entry fees taxable?

Sponsors need to be aware that charges to the public for admission to the event are taxable. Entry fees at a place of amusement, fair, or athletic event are also taxable, even if the fee is used for prizes. However, entry fees are not taxable when admission is charged.

14. What are some common questions about filing the sales tax return?

Tax Included in the Price
If sales tax is collected as part of or included in the selling price of the item or service, the tax needs to be backed out to arrive at the true gross receipts before the return is completed. This is allowed if the retailer makes known to the purchaser that the tax is included in the price which is charged. That can be done by posting a sign or by a notation on the receipt indicating sales tax is included in the price.

For example: A vendor includes the 6% sales tax in the price of all goods sold; for purposes of this example, assume local option sales tax does not apply. The taxable gross receipts are $250. Divide $250 by 1.06. The result - $235.85 - is the amount to be written on line 1 of the return.

If only the state sales tax of 6% applies, divide the gross receipts by 1.06 as shown in the above example. If a 1% local option tax also applies, divide by 1.07.

Exemptions
Sales made that are not subject to sales tax are reported as exemptions. Many taxpayers confuse exemptions with the types of deductions for expenses they are able to take on their income tax returns. Expenses of the business are reported on the IRS Schedule C, Profit or Loss from a Business, for income tax purposes, but are not included as exemptions on the sales tax return. For example, table or registration fees cannot be shown as an exemption.

15. Do I collect sales tax on used items?

Sales tax must still be collected when used items are sold at events, even though tax may have been paid when you originally purchased them for your own use.

09/13/13