combined sales tax form
Hotel/motel and auto rental
The Iowa Sales Tax Quarterly
Return will have a new look for permit holders who charge hotel/motel
tax or automobile rental tax. The period end and due dates
have not changed, but please review them carefully to make
sure you are using the correct form. Editor's
Note: Sales and use tax returns and payments are now made through
eFile & Pay,
effective July 2005.
- Sales/use tax
forms will only be mailed twice each year, rather than
four times a year as in the past.
filers: Each mailing will include forms for two
calendar quarters and include two monthly deposits and
one quarterly return for each quarter. The first and second
months of each quarter require the monthly deposit form,
which includes reporting and remitting the 5 percent sales
tax, local option tax and school local option tax for each
month. The third month of the quarter requires a quarterly
sales tax return that includes detailed local option information,
gross sales, goods consumed, exemptions, hotel/motel tax
and automobile rental tax.
filers: Each mailing will include a quarterly
- Schedule A combines
the previously separate Hotel/Motel and Automobile Rental
returns and applies to the entire quarter.
Line "a" of
this schedule is gross receipts from rentals. Line "b" is
the exemption amounts of sales made directly to and paid
by the federal government, and contracts for the rental of
any room to the same person for more than 31 consecutive
days or an automobile to the same person for more than 60
consecutive days. Line "b" is subtracted from line "a." You
must file even if you had no sales or rental tax activity
during the quarter, entering zeros on appropriate lines.
- Note to
EFT (Electronic Funds Transfer) monthly filers: You
will receive two quarterly returns only, since you do not
send in the paper deposit form.
Line reference correction
sales tax quarterly return may contain line reference errors
on the local option schedule. References to lines 7 and 8 should
instead refer to lines 6b and 6c.
Do your business tax clients
collect hotel-motel taxes? For a complete list of towns and
counties affected, go here (Excel).
Effective April 1,
2002, the following towns have changed or implemented a hotel-motel
- Dyersville will
increase their hotel and motel tax rate to 7%.
- Avoca will implement
a hotel and motel tax for 7%.
- Eldridge will implement
a hotel and motel tax for 7%.
- Nevada will implement
a hotel and motel tax for 6%.
- Sheldon will implement
a hotel and motel tax for 5%.
- Stuart will implement
a hotel and motel tax for 5%.
Please note: If
a jurisdiction with the hotel/motel tax also imposes the regular
local option tax and/or the school local option tax, only the
hotel/motel tax applies to room rental. Editor's
Note: As of July 1, 2008, the local option tax (LOST) does
not apply, whether or not the rental is subject to hotel/motel
Iowa local option
may be added January 1 and July 1 of each year. Our department
is notified 90 days in advance, and we immediately begin updating
our Web files. We try to have the files updated at least 30
days in advance of the implementation date.
The most comprehensive
file we have on regular and school local option taxes is an
Excel file, which can be found on our local
option information page.
You will notice arrows
by the names of the columns. These allow you to sort out only
the information you need. For instance, if you want to know
which jurisdictions came on board January 1, 2002, for regular
local option, you click arrow of the column named LOST Eff.
Date. It will list all the effective dates in the whole file.
Choose 01/01/02 and Excel will list only those jurisdictions.
To go back to the whole list, click on the same arrow and choose
Note: "Sort" is no longer available in the Excel file.
on Iowa sales tax law
For an update on sales tax
law, visit the Iowa Tax Research
Library (ITRL) and click on What's New. Updates in the
Iowa Administrative Code and IDRF Policy letters are updated
to the ITRL every Monday and we recommend visiting it regularly
to stay up to date.
and detective services and Iowa Tax
Are security services
or detective services taxable?
from these services is subject to Iowa sales tax and to Federal
and Iowa income taxes. This includes such work done by off-duty
law enforcement officers. Security services include, but are
not limited to, security guards, investigative services, and
burglar or fire alarm systems. Detective service is the service of investigation
for the purpose of obtaining information.
also applies to security and detective services provided by
law enforcement officers on a part-time basis.
Individuals who receive
income from the performance of security services or detective
services are required to report that income on their Federal
and Iowa income tax returns. This applies to income earned
by an employee of the person/company for whom the service is
provided and to income earned by a person who is providing
the service as an independent contractor.
For more information
on reporting security and detective services income on your
income tax return, see the complete text of the Security
and Detective Services publication.
and detective services are subject to Iowa sales tax. Therefore,
an independent contractor performing security services or
detective services is required to obtain an Iowa sales tax
permit, charge the tax to their customer, and remit that
tax to the state. An Iowa Business Tax Registration form
should be completed to apply for a sales tax permit. This
form is available on the departments Web site; it may
also be completed online.
Sales tax applies
to the full amount charged to the customer for providing a
security service or detective service. However, mileage and
other travel expenses, as well as lodging and meal expenses,
are not taxable if separately identified, separately billed
and reasonable in amount.
Anyone who has performed
security services or detective services as an independent contractor
without collecting the appropriate sales tax should complete
an Iowa Business Tax Registration form to obtain a sales tax
permit. Quarterly sales tax returns for past years in which
sales tax was not remitted must be completed, and the appropriate
sales tax must be remitted. The sales tax is still due, even
though it was not collected from customers.
Reference Rule 701-26.69,
Iowa Administrative Code
a better way
More and more, businesses
and individuals are paying bills automatically by having payments
transferred directly from their bank accounts. You can remit
Iowa sales and use taxes easily, too, through Electronic Funds
returns eliminated? Not at this time. For example, monthly
filers do not send in paper monthly deposit forms but still
send in a paper quarterly return.
You can learn more
about EFT in our Electronic Funds Transfer booklet.
businesses and Iowa taxes
might not know their activities in Iowa may be subject to Iowa
tax. Businesses located outside of Iowa frequently have representatives
and/or employees in Iowa to maintain, establish, or further
their market share within the state. These businesses need
to contact our department to determine whether or not they
should be paying Iowa tax. In the long run, they will save
time and money by contacting us first.
These businesses can
check out "nexus" qualifications on
our Web site.
Do you know a business
that might need this information? Please send it on; youll
be doing them a favor.
the errors on your returns
of tax returns begins with the taxpayer. Returns that are completed
correctly and completely are more easily processed. Returns
that are not complete and correct require additional correspondence
and resolution. Our improved computer system helps us correspond
with permit holders more efficiently than in the past. We will
contact you about errors whenever we can. We do, however, encourage
you to take a second look at your return before sending it
are mailed a schedule showing the permit numbers and locations
of all their stores on a quarterly basis. Be sure to complete
these schedules, showing the 5 percent tax collected on a quarterly
basis. We need these schedules to be filed with the quarterly
Please remember to
complete the back of the sales tax quarterly return, giving
us the taxable amount of sales for local option and/or school
local option in the correct county(s). These need to be quarterly
figures, not monthly. If no sales were made in your location
county, complete the back with a zero for that county. It is
important to complete the local option portion of the return
so that we can distribute the correct amount of local option
tax to the correct counties.
Have you ever wondered
what the "triangles" are on certain lines on the
return? Lines with these symbols should always be filled in.
They are called "key lines," and our data entry people
are required to enter the amounts from these lines into the
computer. When only the "Amount Paid" line is filled
in, processing becomes time consuming and costly.
that the amounts on the quarterly return are for all three
months of the quarter. Sometimes monthly filers enter only
the amounts for the third month of the quarter.
If the people completing
your returns are not receiving this newsletter, you may want
to have them subscribe to our Business Taxes eList. You can
then be sure that they are receiving the Iowa tax information
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