<%@LANGUAGE="JAVASCRIPT" CODEPAGE="1252"%> Iowa Department of Revenue electronic newsletter: Iowa Tax eNews
graphic for Iowa Department of Revenue Tax eNews electronic newsletter
June 2011 ------------------------------------------------------------------------------------------------------------------------------------------------

In This Issue

2011 Iowa Legislation

Legislative summaries for 2011 will be posted in the Research category of our Web site as soon as they are available.

Iowa business tax return deadline
extended for flood disaster areas

Iowa Department of Revenue Director Courtney Kay-Decker has granted an extension of time for affected taxpayers to file the quarterly Iowa sales/use tax and withholding returns for the period ending June 30, 2011. Those returns can be filed by October 31, 2011 without penalty or interest, for taxpayers located in one of the six disaster areas.

The Director of Revenue is authorized by law to extend the period of time for filing tax returns and to suspend any penalty or interest associated with those returns for taxpayers whose principal residence or business is located in a disaster area declared by the governor. Governor Branstad has declared the following six counties bordering the Missouri River to be disaster areas: Fremont, Harrison, Mills, Monona, Pottawattamie, and Woodbury.

When filing a return on extension for the period ending June 30, 2011, please remember the following:

  • Select the correct period for the return being filed through the eFile & Pay system. 

- Choose Apr 1 – June 30, 2011, for the June quarterly return
- Choose July 1 – Sep 30, 2011, for the September quarterly return.

  • The eFile & Pay system will automatically calculate penalty and interest if the June return is filed after August 1, 2011.  IF YOU ARE LOCATED IN ONE OF THE COUNTIES LISTED ABOVE, disregard the penalty and interest calculated for the June 2011 quarter by eFile & Pay, when filing by October 31, and pay the tax due.

Information for nonresidents temporarily relocating to Iowa

The Department is receiving questions regarding nonresidents who temporarily relocate to Iowa due to the flooding along the Missouri River. Below are answers to some of the frequently asked questions.

  • A taxpayer that moves to Iowa temporarily due to flooding would not be considered an Iowa resident for Iowa income tax purposes.
  • If a nonresident earns $1,000 or more in Iowa source income (working in Iowa), they would be required to file an Iowa income tax return.
  • Employers who have employees working in Iowa should withhold Iowa income tax on wages for work that is performed in Iowa.

For more information, please contact the Iowa Department of Revenue at idr@iowa.gov or call 515-281-3114 or 1-800-367-3388 (Iowa, Omaha, Rock Island, Moline), 8 a.m. - 4:15 p.m. CT.

Iowa's Sales Tax Holiday scheduled for August 5-6

Iowa's annual Sales Tax Holiday will be held Friday, August 5, and Saturday, August 6, 2011.

For more information, please see our Sales Tax Holiday information.

New Local Option Sales Tax Jurisdictions - July 1, 2011

Cedar (#16) 1%

  • West Branch (sunsets 06/30/15)

Dallas (#25) 1%

  • Bouton (sunsets 12/31/20)

  • Redfield (sunsets 12/31/20)

Madison (#61) 1%

  • Bevington (no sunset)

Income Tax Booklets – Automatic Mailing Eliminated for 2011

Beginning with tax year 2011, individual taxpayers will no longer automatically receive paper income tax forms and instruction booklets in the mail from the Iowa Department of Revenue (IDR).

The IDR, along with the Internal Revenue Service (IRS) and many other states, has taken this step because of the continued growth in electronic filing and the need to reduce expenses.

We encourage all taxpayers to file their returns electronically. eFiling is safe, easy, and refunds are issued in days instead of weeks.

For information on electronic filing, click here. You may qualify to eFile for free!

Still want paper? Options include:

  • Forms and instructions are available online at www.iowa.gov/tax
  • Call our forms order line at 1-800-532-1531
  • E-mail a form order request to IowaTaxForms@Iowa.gov
  • Mail a form order request to Iowa Department of Revenue; P.O. Box 10460; Des Moines IA 50306-0460
  • Pick up a booklet at the IDR office on the 4th floor of the Hoover State Office Building, located at 1305 E. Walnut in Des Moines

Sales Tax on Delivery Charges and Fuel Surcharges

Transportation and delivery charges are exempt from sales tax, as long as they are:

  • separately stated and
  • reasonable in amount and
  • directly related to the cost of transportation.

“Delivery charges” means the amount(s) charged by a seller for preparation and delivery of personal property to a location designated by the purchaser. This includes, but is not limited to, charges for transportation, shipping, postage, handling, crating, and packing.

Fuel surcharges billed to customers must meet these same requirements to be exempt. Fuel surcharges related to the cost of transportation are typically based in some way on the distance traveled. This might include a specific "per mile" charge or perhaps differing surcharge amounts based upon certain "ranges" of miles traveled. Fuel surcharges assessed in this manner are exempt from sales tax assuming they also meet the requirements of being separately stated and reasonable in amount.

A fuel surcharge that is imposed as a "flat fee" (the same amount charged to all customers without regard to the distance traveled) or calculated as a percentage of the cost of the good to which it applies is not considered part of exempt transportation or delivery charges, and is taxable.

Tax-Fax Option for Forms and Publications Discontinued

The Iowa Department of Revenue (IDR) discontinued the Tax-Fax system in June, 2011. The Tax-Fax system was an automated method for taxpayers to have Iowa tax forms and publications faxed to them.

The IDR took this step due to limited usage of the system and the availability of other options to taxpayers, as well as to help reduce costs.

Option available for taxpayers to obtain Iowa tax forms and publications:

  • Taxpayers can get the necessary forms and publications online at www.iowa.gov/tax

Options available for taxpayers to obtain Iowa tax forms only:

  • Call our forms order line at 1-800-532-1531
  • E-mail a form order request to IowaTaxForms@Iowa.gov
  • Mail a form order request to Iowa Department of Revenue; P.O. Box 10460; Des Moines IA 50306-0460
  • Pick up a form at the IDR office at the Hoover State Office Building (4th Floor), located at 1305 E. Walnut in Des Moines

eFile Service Unit Discontinued

The Iowa Department of Revenue discontinued the eFile Service Unit (eSU) in July 2011. eSU was a group of representatives who assisted taxpayers with questions about electronic filing of income and business taxes. Representatives in Taxpayer Services will now be responding to these questions.

Questions regarding electronic filing should be directed to Taxpayer Services at:

  • 515-281-3114 or
  • 1-800-367-3388 (Iowa, Omaha, Rock Island, Moline)
  • idr@iowa.gov

NOTE: The eSU telephone numbers and e-mail address are in the process of being eliminated.

New Phone Number for Temporary Sales Tax Permits

The department now has a new telephone number to call if you need a temporary sales tax permit for a special event in Iowa. Vendors who need temporary sales tax permits should contact the sponsor of the event or contact our Special Events staff at 515-725-0259.  If you are a vendor at 3 or more special events in Iowa within a one year time period, you should obtain a permanent Iowa sales tax permit.

Tax on Services Performed by Students

During the summer months many students may perform services that are subject to Iowa sales tax.  A complete list of taxable services can be obtained in our publication titled Services: Which ones are taxable?

For example, 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 or structure. Persons who mow lawns are providing a taxable service regardless of their ages; however, effective 7/1/06 a casual sale exemption exists if (1) the owner of the business is the only person performing the services; (2) the owner of the business is a full-time student; and (3) total gross receipts from the services do not exceed $5,000 for a calendar year. Please see our handout on landscaping and lawn care .

 A casual sale exemption may also apply to services which would otherwise be taxable if:

1. It is a sale of a nonrecurring nature, and

2. The seller at the time of the sale must not be engaged in selling goods or taxable services for profit; or if the seller is so engaged, the casual sale must be outside the regular course of business.

Two separate selling events outside the regular course of business within a 12-month period are considered nonrecurring. Three separate selling events within a 12-month period are considered recurring. Tax applies beginning with the third separate selling event. However, when a sale event is planned and occurs consistently over a span of years, the sale is recurring and not casual, even though only one sale event occurs each year.

Students performing taxable services for which a casual sale exemption does not exist should apply for a sales tax permit online at Apply for an Iowa permit .

Sales tax permit certificate need not be posted

Sales tax permits are no longer required to be posted at your place of business. Therefore, the Department does not provide a permit certificate to be used for that purpose. Instead, new businesses receive a postcard with their permit number on it.

If needed, a copy of the permit postcard can be obtained by e-mailing us at idr@iowa.gov. A copy of the postcard may also be requested on the Change, Correction, or Cancellation of Tax Permit form.