| JUNE 2009 |
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Message from the Director: The 2009 legislative session has ended and July 1 is the effective date of most legislation. We have placed a summary of all tax related legislation on our Web site at www.state.ia.us/tax/taxlaw/taxlawlegis.html The legislation is indexed by bill number and also by tax topic. Legislation tax topics include income tax (corporate and individual), property taxes, sales and use, hotel/motel, motor fuel, local option, and miscellaneous. We are in the process of drafting rules to assist in understanding the changes. The most time sensitive changes are the repeal of certain exemptions from the hotel/motel tax (see separate article in this newsletter), the elimination of casual sale for ATVs, and the treatment of leased motorcycles like leased cars for tax purposes. It is a Department goal to keep you current on Iowa tax issues of importance to you. Please look at our Web site regularly. We highlight current tax topics of interest on our home page. You will also find links to IRS pages that we determine may be of interest to Iowans. Please let us know if you would like to see any changes in our Web site. We consider ourselves to be a service organization, and service to Iowans will remain our top priority. Mark R. Schuling New Local Option Sales Tax Jurisdictions - July 1, 2009
Local option rate increase from 0.5% to 1%
2009 Sales Tax Holiday
Please be aware that the holiday does not include Sunday.
eFile & Pay: Filing "Zero" Returns Customers registered for sales, use, or withholding tax must file a tax return, even if they have no tax due. If you do owe, payments can be made four ways:
You are probably already filing your returns through eFile & Pay. If you are mailing your payment, consider ePay. You will mail nothing! Retailers NOT Allowed to Absorb Sales Tax Retailers must add sales tax to the price of taxable goods or services and collect the tax from the purchaser. The retailer cannot advertise or in any way indicate that the sales tax is being absorbed or paid by the retailer. A retailer may include the sales tax in the price, which is often done when selling concessions or admissions to movie theaters and sporting events. When this happens, the retailer must post a notice or make a statement on the invoice / receipt that the purchase price includes the sales tax. Also remember that sales tax is due when taxable goods are delivered or taxable services are performed, not when payment is received from the customer. Hotels and
Motels – The following is a summary of the taxation of room rentals. Contracts made directly with Iowa state / local governmental entities and schools Prior to 7-1-08: Contracts made directly with Iowa state / local governmental entities and schools were exempt from the 5% state excise tax (previously sales tax) on room rental, but were not exempt from the local hotel / motel tax. From 7-1-08 to 6-30-09: Contracts made directly with Iowa state / local governmental entities and schools are exempt from both the 5% state excise and local hotel / motel taxes. Beginning 7-1-09: Contracts made directly with Iowa state / local governmental entities and schools will be subject to both the 5% state excise and local hotel/motel taxes. Contracts made directly with the federal government Contracts made directly with the federal government are exempt from both the state 5% excise tax and local hotel/motel tax throughout these various periods. However, rooms rented to federal government employees who are paying with cash, personal check, or personal credit card are subject to tax. This is true even if the employees will be reimbursed by the federal government. Also exempt from state excise and local hotel / motel taxes during all periods
All conference and banquet room rental is exempt from the following Iowa taxes:
These exemptions apply to conference and banquet room rental in hotel and motels, as well as to freestanding conference centers and restaurant banquet rooms. There may be other items or services included or associated with the banquet or conference room rental that are subject to the state 6% sales tax, plus any applicable LOST. Examples of taxable items or services that may be included or associated with room rental include prepared foods, alcohol, soft drinks, candy, security services, and the rental of furnishings or equipment. If the facility bills a lump sum for the room rental and taxable items or services, the state 6% sales tax, plus any LOST, applies to the entire bill. If taxable items and services are separately stated from the room rental on the invoice, the state 6% sales tax, plus any LOST, only applies to the sales price of the taxable items and services. When you contact our Department, please have available the form, bill, document, or other material about which you have a question. We can serve you better and faster if you do. When mailing multiple returns When mailing tax returns for more than one period, please send them in separate envelopes. This reduces the chances of a return being accidentally overlooked and not processed properly. Legislation Legislative summaries are posted in the Research category of our Web site. Are you a new business? Or just need to know more? Our tax classes are held all year statewide. In addition, we make house calls! Gather your 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 contact you. |
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