eFiling of Iowa
Sales and Retailer’s Use Tax Coming Soon
For tax periods beginning
in July 2005, businesses that are registered to collect Iowa sales or
retailer’s use tax will use eFile & Pay to electronically file
their return information. Payment of the tax due may also be made electronically
through eFile & Pay, although payment by paper check will be an option
for most taxpayers.
eFile & Pay is
the department’s new system for filing Iowa business taxes either
online or by touchtone telephone. An increasing number of taxpayers have
been requesting new electronic methods for filing and paying Iowa business
taxes. eFile & Pay is our response to those requests. The benefits
of the system include the convenience to file and pay on a 24/7 basis
and no need to rely on the department to distribute paper returns. We
also expect electronic filing to reduce the number of returns that must
be reviewed for accuracy. The department’s experience with electronic
filing of individual income tax returns shows that returns submitted
electronically have significantly fewer errors.
eFile & Pay began
in January for Iowa employee withholding tax. Those who are registered
for Iowa withholding and have already received a Business eFile Number
(BEN) from the department will use the same BEN to file other taxes as
well. All Iowa sales/retailer’s use tax permit holders who are
not registered for withholding will receive a letter including their
personal BEN prior to the first filling deadline.
As was the case for
withholding, paper returns will no longer be available; however, payment
by paper check will continue to be one of the payment options for most
taxpayers. Preprinted payment vouchers will be mailed to those who qualify.
We recognize this is
a change. Over the coming months, we will use every means at our disposal
to keep you informed. The department will send information to each permit
holder about the process, and educational and training opportunities
will be made available.
We will also use e-list
messages to send updates on eFile & Pay. If you know business owners
who haven't signed up to receive our free tax news by e-mail, encourage
them to go to our Web site at and click on the e-list graphic.
The department has
received a number of positive comments from taxpayers regarding eFile & Pay.
A few of them are included below:
sure the eFile & Pay system was going to be an improvement. Glad
to admit I was wrong."
"I truly appreciate
filing & paying monthly withholding this way. What a step forward!"
you guys working on ways to make our jobs easier!"
"Thank you for
this great convenience!!"
"Thank you eFile!
"What a great
system! Easy to use, fast, efficient."
Questions on eFile & Pay?
You can e-mail our eFile & Pay
Unit or visit our Web
withholding tax tables issued
Employers will be reducing
the amount of Iowa tax deducted from employees’ paychecks beginning
April 1. The Iowa Department of Revenue mailed the new tax tables and
formulas to more than 80,000 withholding agents at the end of February.
Iowa withholding tax rates have not changed since 1998.
Tables are revised when changes in state or federal law result in a significant
imbalance between the amount of tax withheld and the amount of tax actually
owed. The new tables are intended to restore the balance and should reduce
the amount of withholding tax sent to the State of Iowa by approximately $100
million in 2005.
According to the Iowa Department of Revenue, most taxpayers will see an increase
in their take-home pay throughout the year; however, the size of the refund
they receive after filing their 2005 tax returns will decrease. Furthermore,
some taxpayers that now receive refunds may end up paying additional tax when
they file their 2005 tax returns.
Employers and taxpayers who have questions should call Taxpayer Services at
1-800-367-3388 to talk to a tax specialist.
eFile classes well attended
The results are in
on the presentations the department's field Tax Specialists gave over
the past few weeks. 32 presentations were given to a total of more than
1,400 participants. Attendees posed many helpful questions and most of
the comments were favorable. The figures below reflect the number of
class participants for each specialist.
landscaping subject to Iowa sales tax
A reminder that lawncare and landscaping services performed
in Iowa are subject to sales tax.
“Lawn care” includes but is not limited to the following services:
mowing, trimming, watering, fertilizing, reseeding, resodding and killing
of insects, moles, other vermin, weeds, or fungi which may be threatening
a lawn. Persons who mow lawns are providing a taxable service regardless
of their ages.
The services performed by one who arranges and modifies the natural condition
of a given parcel or tract of land so as to render the land suitable for
public or private use or enjoyment is engaged in the business of “landscaping.” Landscaping
performed on or in connection with new construction, reconstruction, alteration,
expansion or remodeling of a building or structure is not subject to tax.
For complete information, please read our brochure, "Iowa
Tax Rules: Landscaping and Lawn Care." (pdf)
seeds, plants, and fruit trees
purchaser of vegetable seeds, plants or fruit trees will be consuming
the produce from the seeds, plants or trees, the sale is taxable in Iowa.
Sales of vegetable seeds, plants, and fruit trees are exempt if the buyer
will be selling the produce.
About Iowa Business Taxes
Are you a new business?
Or just need to know more? Our tax
classes are held all year statewide.
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!
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by e-mail, you are already signed up. If you are reading this on our
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