from the Director:
Pay the tax
Iowa's Tax Amnesty program
began September 4 and will end October 31, 2007. The Tax Amnesty program
is available for all state taxes administered by the Department of
Eligible taxpayers include
those who did not file a required return, those who made mistakes on
a previously-filed return, and those who may simply have tax debt with
the Department. The program allows for a waiver of all penalties and
one-half the interest for past-due tax returns or reports and any additional
taxes due for returns or reports that were originally due on or before
December 31, 2006.
The benefits of participating
in the Tax Amnesty program include the following:
- participating taxpayers
can “wipe the slate clean” by clearing up unpaid, underreported or
overdue taxes without fear of retaliation;
- taxpayers can save money
because the program offers a one-time chance to pay without penalty
and one-half the interest waived;
- taxpayers will be able
to avoid legal action; and
- participating in the Tax
Amnesty program will not increase the chance of being audited in
The official Iowa
Tax Amnesty Web site can be found at IowaTaxAmnesty@iowa.gov .
The site includes frequently-asked questions and their answers and
access to the Tax Amnesty application and other tax forms. In addition,
the Department is taking calls at the Tax Amnesty toll-free number:
Mark Schuling, Director
entities: Sales tax issues
issue of sales tax in relation to nonprofit entities is often confusing
to businesses that sell to them and to the organizations themselves.
The information below is general in nature. For more details, including
definitions and numerous examples, please see Nonprofit
entities: Sales to and sales by (78-595).
TO Nonprofit Entities
Nonprofit entities, churches
and religious organizations are not automatically exempt from
paying state sales taxes on taxable goods and services. This is true
even if they are exempt from paying state and federal income taxes.
State sales tax and local option tax, if applicable, must be paid unless
some other general sales tax exemption applies. In other words, a nonprofit
entity, church or religious organization is treated the same as any
other private citizen for sales and use tax purposes when purchasing
taxable goods and services.
An exception is sales
made to private nonprofit educational institutions. They do not pay
sales tax on taxable goods and services that are used for educational
purposes. An “educational institution” primarily functions as a school,
college, or university with students, faculty, and an established curriculum.
The faculty must be associated with the institution, and the curriculum
must include basic courses that are offered every year. A library is
also considered an “educational institution.”
Certain other nonprofit
organizations are also exempt from sales and use tax under Iowa law.
Please see Nonprofit entities: Sales
to and sales by for a list of those entities.
Sales made by entities or
organizations engaged in educational, religious, or charitable activities
are exempt if:
- The gross receipts must
be from a retail sale or rental of tangible personal property or
- The profits from the sale
must be used by or donated to one of the following:
- An entity that is exempt
from federal income tax under Internal Revenue Code Section 501(c)(3);
- A government entity;
- A private nonprofit educational
- The net proceeds after
direct expenses are paid must be used for qualifying educational,
religious, or charitable purposes. The expenses must be necessary
and be directly related to the activity.
NOTE: All receipts from gambling
activities sponsored by nonprofit entities are subject to sales tax,
regardless of the ultimate use of the proceeds.
Legislative Summary is now available.
For customers who file Iowa
business returns electronically but pay by mail, we now offer a system-generated
payment voucher. On the confirmation screen, you will see two print
buttons if “mail a check” has been selected: one button to print the
confirmation screen and a second button to print the voucher to mail
with the payment. eFile & Pay will automatically fill in the payment
voucher so that it can be scanned by our equipment.
Taxpayers continue to take
advantage of ePay, the direct debit function in eFile & Pay. Currently,
we receive 50 percent of sales tax and 63 percent of withholding payments
electronically. Taxpayers who file and pay electronically mail
Pies and jack-o'-lanterns
This information is no longer valid. Pumpkins are considered food and exempt from sales tax.
The Department recently refined
its position on whether pumpkins are subject to Iowa sales tax to more
closely match what we believe to be their predominant use.
In the past, pumpkins were
exempt from sales tax as a food (edible squash), even if they were
to be later made into jack-o'-lanterns or used as decorations.
Our position now is that pumpkins
are taxable if:
- They are advertised
to be used as jack-o'-lanterns/decorations, or
- It is understood
that they will be used as jack-o'-lanterns/decorations
Pumpkins are exempt in the
- The buyer completes a sales
tax exemption certificate stating they will be used as food, or
- The pumpkins are a specific
variety used to make pumpkin pies and are advertised in that way, or
- They are purchased with
Retailers who sell pumpkins
should keep these guidelines in mind and make any necessary changes
to their tax treatment of pumpkin sales.
you a new business? Or just need to know more? Our
tax classes are held all year statewide.
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
Snow removal is not subject
to Iowa sales tax.
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