The professional serices of a veterinarian are exempt from sales tax.
This applies to services performed on:
- livestock raised for agricultural or dairy purposes or production for market
- companion pets
- draft animals
- laboratory test services for all animals
- semen analysis for fertility purposes
- “cosmetic” service of grooming pets
- pet grooming as an integral part of veterinary care
- grooming of livestock
Grooming for Both Veterinary and Cosmetic Reasons
The primary purpose for the grooming determines if sales tax should be collected.
Invoicing Cosmetic and Veterinary Services
When charges for cosmetic treatment and veterinary treatment are invoiced separately, sales tax is collected only on the cosmetic portion.
Charges made for the boarding or training of animals are not subject to sales tax. The food and other supplies used when furnishing boarding or training services are taxable at the time of purchase.
Livestock raised for agricultural production means any domestic animal raised on a farm as a source of food or clothing.
- farm deer
- fish and other animals which are products of aquaculture
- animals used for racing
- other nondomesticated animals, even if raised in captivity as a source of food or clothing.
Draft horses are horses that pull loads, including loads in shows, or transport persons or property.
Purchases and sales of draft horses are exempt from tax. Draft horses include:
- and others commonly considered draft horses
Racing Horses and Horses for Recreation
Purchases and sales of racing horses and those used for recreation are taxable.
Purchases for resale, such as:
- grooming items
Items used in treating livestock raised for agricultural or dairy purposes or production for market, such as:
- and similar items
When claiming exemption, the veterinarian must provide the seller with an Iowa Sales Tax Exemption Certificate (pdf).
If the veterinarian paid sales tax when purchasing items and later sold them, the veterinarian can adjust the sales tax return by entering the amount paid for the items as an “other” exemption on line 4.
Taxable supplies generally include:
- items that are not resold
- magazine subscriptions
- professional journals or publications
- office stationery
- surgical equipment
- disposable hypodermic syringes
- ear tags
- hog rings
- marking chalk
Items used in treating companion pets and other animals (for hobby purposes)
Taxable items include:
- and similar items
Sales tax on these items should be paid to the seller. If the tax was not paid to the seller, it can be paid on line 2 of the veterinarian’s sales tax return as goods consumed.
Purchases from Out of State
Veterinarians may be responsible for consumer's use tax on items that were purchased outside of Iowa, for use in Iowa, and on which tax had not already been paid. See Iowa Consumer's Use Tax for additional details.
Tools, machinery, and equipment
A veterinarian’s purchase of tools, machinery, or equipment used to aid in performing veterinary services is subject to sales tax. However, they are exempt if primarily used for livestock raised for agricultural or dairy purposes or production for market. Veterinarians should be cautious in claiming this exemption.
Computers purchased by a veterinarian are taxable.
Purchases of Registered Vehicles
Vehicles subject to registration, or any implement customarily drawn by or attached to a registered vehicle, are subject to Iowa’s one-time registration fee. The fee is imposed on the purchase price at the rate of 5%. This includes camping trailers and horse trailers.
Items used in treating livestock raised for agricultural production include, but are not limited to:
- similar items used to prevent or treat diseases
Items used in treating pets and animals other than livestock include, but are not limited to:
- grooming items
These should be billed separately from any veterinary services provided.
Local option tax generally applies to the same goods and services that are subject to sales tax. The local option tax applies if the service or product is performed or delivered in a local option tax jurisdiction.
Products, services, or organizations that are exempt from sales tax are usually exempt from local option tax.
There is no special application or permit number for local option tax. It is paid on the sales tax return.