2004 Legislative Summaries Available Online

Summaries of the 2004 tax-related legislation passed by the Iowa Legislature and signed by the Governor are now available on the department's Web site.

A number of changes related to the application of sales tax in Iowa are set to take effect July 1, 2004. Please visit our Web site for more information.

A reminder that Iowa local option sales tax and school infrastructure local option tax jurisdictions can change on January 1 and July 1 each year. The current list of jurisdictions is available on our Web site.

We also maintain a list of the newest local option tax jurisdictions.

Iowa Sales Tax Holiday

The annual Iowa Sales Tax Holiday is scheduled for August 6-7, 2004. To learn more about this popular yearly event, visit our Sales Tax Holiday pages.

Are Churches Exempt From Paying Sales Tax?

Churches, religious organizations, and other nonprofit entities are not exempt from paying state sales taxes on taxable goods and services. This is true even if these entities are exempt from paying state and federal income taxes.

State sales tax and local option taxes must be paid unless some other general sales tax exemption applies. For example, any purchase made for resale is exempt from state and local sales taxes.

The Iowa Department of Revenue encourages businesses to give customers its phone number when disagreements over sales tax arise. To talk to a tax specialist, call 1-800-367-3388. If you prefer, e-mail.

Attention Livestock Producers

The 2003 IA 132 Cow/Calf Claim form for corporation and individual income tax is due (postmark date) October 31, 2004, for annual-year filers and 10 months after the close of the fiscal year for fiscal-year filers.

If you did not include your IA 132 with your return, do not amend the return. Send the 2003 IA 132 to:

If you have questions, please call 1-800-367-3388.

Buying Computers For Your Business?

Your purchase may be exempt from Iowa sales tax. Your purchase is exempt if you are a “commercial enterprise,” which includes businesses and manufacturers conducted for profit, insurance companies and financial institutions.

If your business is a “profession” or “occupation,” your computers are taxable. For example, lawyers and doctors do not qualify for the exemption. Farming is considered to be an occupation; therefore, farmers do not qualify for the exemption.

More information is available in our Iowa Sales Tax on Computers booklet.

Ask Before You Sell!

An item may be taxable to one buyer and not another.

For example, the sale of a skidloader is:

• Exempt when sold to a farmer if it will be used directly and primarily in agricultural production
• Subject to the 5 percent state rate only when sold to a construction contractor who will use it directly and primarily in new construction, reconstruction, alteration, expansion, or remodeling of real property or structures.
• Subject to the state rate and any local option when sold to most other customers

Example 2: The sale of T-shirts is:

• Exempt when sold to a buyer who will resell them
• Taxable to your typical customer
• Exempt during the Sales Tax Holiday, if it costs less than $100

Example 3: The sale of band uniforms is:

• Exempt if sold directly to a school and paid with a school voucher
• Taxable if sold to the PTA, even if they are giving the uniforms to the school as a gift

IDR Web Site Changes

Look for changes to the Department of Revenue Web site sometime after July 1. We are attempting to make the site easier to navigate and also minimize the amount of scrolling on most pages. It is our goal not to change page addresses, so you should not have to redo your Favorites/Bookmarks.

Look for some information to move to new pages though and additional information to be added throughout the site over the coming months. If you have trouble finding information, please contact our department.

Lists
The department is making every effort to inform businesses, professionals and individuals of these and future changes. Please help us promote the department’s free "eLists." Our department may not have the resources for future mass mailings. Notice of 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, you will automatically receive Iowa tax news updates and newsletters. Anyone may sign up!

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