DOCKET NO. 05-30-6-00153
On August 15, 2005, the Petitioner filed a request for Declaratory Order with the Department. On September 15, 2005, the Department issued a Declaratory Order regarding the issues set forth based on the presented facts. In response to this Declaratory Order, the Petitioner filed another Declaratory Order on December 2, 2005, providing additional facts and requesting additional clarification in order to comply with Iowa sales and use tax laws. In this most recently filed Declaratory Order, the Petitioner has incorporated by reference the facts, issues and response of the Department.
The following facts as set forth in the original Declaratory Order are as follows: Petitioner manufacturers and sells asphalt and asphalt related products to contractors, government agencies, wholesalers, and other third parties. The Petitioner has manufacturing facilities in and outside of Iowa. The Petitioner states that the Petitioner has sales tax nexus with Iowa. Most of the orders for the Petitioners products are placed and accepted in Iowa. The products sold by the Petitioner can be delivered to the Petitioners customers either from one of the Petitioners Iowa locations or from one of the Petitioners locations outside of Iowa. When shipping the products, the Petitioner utilizes FOB origin and FOB destination terms in its sales agreements. The Petitioner collects and remits sales and use taxes, unless the Petitioner is given a valid exemption certificate by the customer.
The following are the additional facts as set forth in the Declaratory Order filed on December 2, 2005: The Petitioner has sales representatives and plant facilities located in and outside of Iowa. The Petitioner has sales representatives that visit current and potential customers to discuss products, pricing, shipping and other contract terms. The Petitioner rarely employs purchase orders. Instead, the Petitioners and its customers execute sales agreements. The Petitioner forwards sales agreements from its Iowa location to Iowa customers, who sign and send back to the Petitioners Iowa location. This is done two ways; the Petitioners sales representatives leave a sales agreement with a customer after making a sales call for the customer to sign. When presented with the sales agreements, the customer may sign the agreement and either 1) and hand the signed agreement immediately to the sales representative; 2) mail the signed agreement back to the Petitioners Iowa representative; or 3) mail or forward the signed agreement to the Petitioners facility outside of Iowa. In addition to leaving a sales agreement during a sales call, the Petitioner may forward a sales agreement from its Iowa location to Iowa customer to sign and send back to the Petitioners location outside of Iowa. The Petitioner accepts sales agreements in the location that the customers send back to the Petitioner agreeing to terms and signing. If a customer sends signed sales agreement to an Iowa location, the sales agreement is accepted at that location. If a customer sends a signed sales agreement to a location outside of Iowa, then the sale is considered to be accepted at the location that it is sent outside of Iowa. The Petitioners policy is that sales agreements are only accepted at the facility from which the product will be shipped. As a result, if the product is to be shipped from an Iowa facility, then the sales agreement must be accepted in Iowa. If products are to be shipped from a Minnesota facility, then the sales agreement must be accepted in Minnesota. Prior to issuing a sales agreement from any location, petitioner sets up a sales the agreement in the Petitioners contract management system. This set up is generally done at the plant from which the product will be supplied. After the sales agreement is executed and the customer is ready to receive the product from the Petitioner, the customer generally contacts the plant site where the product is coming from to arrange for product delivery to the customer site. A delivery order is then established in the Petitioners operational and accounting systems. Ease of dispatching product is the primary reason for this. In this Petition, the Petitioner set forth nineteen issues.
The first two issues were issues set forth in the original Petitioner for Declaratory Order but additional clarification was requested. Issues three through nineteen were new issues. The Director address issues one and two and provided additional clarification regarding delivery of products as requested. However, due to the highly factual nature of the remaining issues presented it is the Directors opinion that the remaining issues at hand would more properly be resolved in a more informal type of procedure between the Department and the Petitioner where the parties can informally discuss the situations at issue, obtain the facts, and a written response can be made by the Department for the Petitioner to reference.