<%@LANGUAGE="JAVASCRIPT" CODEPAGE="1252"%> Iowa Department of Revenue electronic newsletter: Iowa Tax eNews
SEPTEMBER 2004
graphic for Iowa Department of Revenue Tax eNews electronic newsletter

In This Issue:
Director's Message
about July 1 Sales Tax Changes
graphic of the letter eFile & Pay Update
Power of Attorney forms Fall tax classes scheduled

Hotel-motel tax

Local option sales taxes

Employers: Iowa Centralized Employee Registry Form

A Message from Director Ralston

Thank you for taking time to read another edition of the Department of Revenue’s Iowa Tax eNews. Please allow me to call attention to changes in Iowa’s sales and use tax laws. These changes, which took effect July 1 of this year, make possible Iowa’s participation in the national Streamlined Sales Tax project. The project is an effort by businesses and states to provide uniformity of sales and use tax laws and administration among states. One important goal of the project is to ensure the collection of taxes already due related to remote purchases, such as those made through catalogs or over the Internet.

In Iowa, the changes had two primary areas of focus. One related to definitions of food and other items. Another changed Iowa’s status from origin-based sourcing for sales and use tax to destination-based sourcing. The sourcing change means that retailers are asked to calculate and collect local option taxes based on the destination of the sale. As you can imagine, this change regarding destination does not have any impact for over-the-counter sellers, such as convenience stores and similar establishments.

State policy makers and we at the Department of Revenue know this is a big change, and we have taken several steps to aid retailers and remote sellers. First, our department Web site has several tools, such as a list of all the taxing jurisdictions in Iowa (Excel), and their applicable tax rates. Another database, which is interactive and downloadable, will soon be available from our site, and it will actually calculate the correct tax for a particular jurisdiction automatically.

Also in an effort to be of assistance, I sent a letter to all Iowa sales and use tax permit holders in July which outlines flexibility related to the changes. The department knows these changes can be confusing and troublesome. My letter explains our department’s policy of service, not sanctions; we want to work with retailers to implement these changes together. In fact, for a transition period of six months (July 1 to December 31, 2004), no penalties will be imposed or other actions taken against retailers who exhibit a good faith effort while trying to comply with the new laws. Retailers all across Iowa have implemented the changes that started July 1, and we continue to work with them during this transition period.

Should you have any questions or comments, please don’t hesitate to contact us. You can contact us by e-mail or call toll-free at (800) 367-3388 (Iowa, Omaha, Rock Island, Moline). And as always, thank you very much for your efforts to comply with Iowa’s tax laws. - Michael Ralston

graphic of the letter e File & Pay begins January 2005

The department will launch its new graphic of the letter eFile & Pay system of filing Iowa withholding for tax periods that begin on January 1, 2005. The system for sales and use taxes is expected to follow in July 2005. Filing and payment options will be available online and by telephone. Paper returns will no longer be provided, although paper payment vouchers will still be sent to most taxpayers.

Taxpayers will discover that filing and paying electronically is a better way to do business with the department.

  • No waiting for paper returns in the mail
  • Access to filing and paying system 24/7
  • Access to filing and payment history 24/7
  • Confirmation that returns and payments are received
  • Secure and confidential transmission of information
  • Ability to schedule payments in advance

Detailed information explaining how the system works will be sent to each withholding agent prior to filing deadlines.

Iowa taxpayers have already proven they are ready to take this step. Sixty percent filed their Iowa individual income tax forms electronically last year. That's more than 800,000 Iowa taxpayers.

Power of Attorney forms

Federal Power of Attorney forms are now accepted by the Iowa Department of Revenue.You must write a statement on the Federal form that indicates you are submitting it for use with State of Iowa forms. The statement needs to be initialed by the taxpayer. Power of Attorney forms should be mailed to Registration Services, Iowa Department of Revenue, PO Box 10465, Des Moines IA 50306-0465; or faxed to 515/281-3906.

Employers: Iowa Centralized Employee Registry Form

An employer doing business in Iowa who hires or rehires an employee must send the Centralized Employee Registry Reporting form and/or the Contractor Reporting Form within 15 days of the hire or rehire date to the Iowa Department of Human Services (IDHS).

The Iowa Department of Human Services (IDHS) has a Web site for completing and submitting the Centralized Employee Registry Reporting form. The Web site is an easy, paperless means of filing this required information. This form may also be faxed or mailed to IDHS.

At this time, the Web site is not able to accept the Contractor Reporting Form. This needs to be either faxed or mailed to IDHS.

These forms may be sent by:

  • Mail - CER, PO Box 10322, Des Moines, IA 50306-0322
  • Fax - 1-800-759-5881 or Locally 515-281-3749
  • Web site - (Centralized Employee Registry Reporting form)
  • CD/diskette - mail to CER, PO Box 10322, Des Moines, IA 50306-0322 (Please contact the CER Hotline for file layout)

Paper forms are available online as follows:

  • Centralized Employee Registry Reporting form: the top portion of the Iowa W-4 provided by the Iowa Department of Revenue.
  • Contractor Reporting Form (470-3100) provided by the Iowa Department of Human Services.

The Centralized Employee Registry Hotline number is 515-281-5331.

Fall tax class schedules set

The fall class schedule is available on the department's Web site. You will find opportunities to learn about Iowa withholding, sales, and local option taxes. Most classes are held at community colleges and a small fee is charged by the college. If you need continuing education units, our classes qualify! Interested in a custom or private class at your business? Use our map to contact the Tax Specialist serving your area.

Local option sales taxes

Iowa local option sales taxes may become effective twice each year: July 1 and January 1. New jurisdictions for January 1, 2005, will be posted on the department's Web site by the end of November.

Hotel - motel tax

These new jurisdictions (Excel format) will enact the hotel-motel tax on October 1.