Sales Tax Changes July 1, 2004
Each sales tax and retailers use tax permit holder will soon receive a letter
from the Iowa Department of Revenue outlining sales tax changes effective
July 1. The letters will be mailed the first week in April.
A list of statewide meetings addressing the changes will be included in the
mailing; more than 100 will be held in April and May, conducted by field
and in-house Taxpayer Service Specialists. The list will also be available
on our Web site.
The department is making every effort to inform businesses of these and future
changes. Please help us promote the department’s Business Taxes eList
to other businesses. Our department may not have the resources for future
mass mailings. Future changes will be made through the media, our Web site
and our eList system.
By subscribing to this free
eList news service on our Web site, businesses will automatically receive
Iowa tax news updates and newsletters. Anyone may sign up!
If you received the newsletter
by e-mail, you are already signed up. If you are reading this on our
Web site, you need to sign
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subscription. Be sure and reply!
- Contractors always pay
tax on building materials for new construction, reconstruction and
alteration unless they are issued an authorization letter and exemption
certificate by certain exempt entities. However, these special exemption
certificates cannot be issued unless the exempt entity registers
its project through the department's online exempt entity/construction
system and receives approval from the department. More
information is available on our Web site, including an explanation
of which exempt entities qualify.
- Exception: Contractors
are exempt from paying tax on wind energy conversion equipment. 701
- An exemption from sales
tax is also an exemption from local option sales tax.
About Iowa Business Taxes
Are you a
new business? Or just need to know more?
Our tax classes are
held all year statewide.
Option Sales Taxes
- Changes effective July
1 will be posted on our Web site before May 1. Many counties will
be adding the school local option sales tax, with several adding
regular local option tax. Check
this page periodically for the latest local option changes.
County (69): Red Oak and the Unincorporated Area did not sunset
on March 31. Continue collecting the 1 percent regular local option
tax on taxable sales in these jurisdictions.
- Changes in local option
tax may take effect twice each year: January 1 and July 1.
/ Transportation Charges
Shipping and Handling
is exempt if...
Freight or transportation
charges are exempt if they are separately invoiced or separately stated
on the bill.
is taxable if...
When freight or transportation
charges are not separately stated in the sale agreement, they become
part of the purchase price and are subject to tax.
Shipping and handling
are taxable (This section regarding shipping and handling is no longer correct. Please see the September 2005 eNews for updated information.)
If a single charge for shipping and handling
is separately stated in the sale agreement, it is taxable. The additional
service of "handling" makes this charge taxable.
Businesses! — Individuals!
Do you purchase
items from out of state or from catalogs or the Internet?
You may owe Iowa Consumer's Use Tax. Find
out why and how to pay.
Make House Calls!
employees or your organization's membership.
We will come to you and address your Iowa business tax concerns.
This service is free of charge. Just e-mail us to
Lawn Mowing, Lawn Care
The services of landscaping,
lawn mowing, and lawn care are taxable unless performed on or
in connection with new construction, reconstruction, alteration, expansion,
or remodeling of a building structure.
Trees, Vegetable Seeds
The sales of these are exempt
through June 30 of this year. Stay tuned for information on the change
of taxation of these items effective July 1.
Legislation Affecting Iowa Taxes
We will keep you posted via
eLists about the changes in Iowa tax law. In addition, legislative
summaries are posted on our Web site. We expect the summary of
2004 legislation to be available in July.