Administrative Orders

The Department is charged by statute with many administrative duties, some of which it accomplishes by taking administrative actions or issuing administrative orders. Depending on what the statute requires, the administrative actions or orders can be either requested of or initiated by the Director. This page also includes judicial reviews of Director's Orders from the current year.

The following orders are from the current year. All orders from previous years can be found in the Iowa Tax Research Library

Administrative Orders

Petitioner, a local government risk pool formed and permitted under Iowa Code sections 331.301(11) and 670.7(1) and consisting of 10 (ten) Iowa counties, requested a declaratory order granting it the right to claim a sales tax exemption under Iowa Code section 423.3(31) when it makes purchases of tangible personal property and services on behalf of its member counties for losses suffered by those counties. The Director found that Petitioner qualified as a governmental instrumentality when it makes those purchases and is therefore exempted from paying sales tax under Iowa Code 423.3(31).

Date: 2021-02-01

In 2015, the Department issued three assessment against Taxpayer for tax years 2004 to 2005, 2006 to 2008, and 2009 to 2011 for unpaid motor vehicle use tax under Iowa Code section 423.5 (for periods prior to July 1, 2008) and unpaid fees for new registration under Iowa Code section 321.105A (for periods after July 1, 2008). Taxpayer protested these assessments, arguing that the assessments were void because the three-year statute of limitation period under Iowa Code section 423.37(1) had lapsed due to Taxpayer's filing of vehicle registration statements with the Department of Transportation (DOT), which Taxpayer argued constituted “returns” for purposes of Taxpayer's filing requirements. Taxpayer also presented a facial constitutional challenge to one of the statutes under scrutiny. Lastly, Taxpayer argued that if the assessments were upheld the Department’s decision to retain Taxpayer’s prior erroneous payment of an automobile rental tax on the vehicles in question would result in unjust enrichment to the Department. The Administrative Law Judge (ALJ) dismissed each of Taxpayer’s arguments, finding that a filing with the DOT does not equate to the filing of a return with the Department, only courts have the power to address facial constitutional challenges, and Taxpayer failed to request a refund of erroneously paid tax within the proper deadline, therefore, its unjust enrichment claim was insufficient to void the assessments. The Director affirmed the ALJ’s Proposed Decision while expanding upon the ALJ’s conclusions.

Date: 2021-01-06

Petitioner, a company offering web search portal services by means of data centers in Council Bluffs, IA, was considering developing additional sites that were not adjacent to Petitioner’s initial physical location. Petitioner requested a declaratory order establishing that these additional, non-adjacent locations and the purchases needed for the maintenance and operation of the web search portal business qualified for the sales tax and property tax exemptions under Iowa Code sections 423.3(92), 423.3(93), 427.1(35) and 427.1(36). Based on a 2012 declaratory order concerning the same Petitioner and substantially the same issue, the Director found that Petitioner’s contemplated non-adjacent locations and purchases for the maintenance and operation of the web search portal business qualified for the stated sales tax and property tax exemptions.

Date: 2020-12-04

Petitioner, a charitable organization under Internal Revenue Code § 501(c)(3), inquired about whether its retail sales of specified digital products to Iowa customers are exempt from sales tax pursuant to Iowa Code section 423.3(78). The Director found that Candid’s entire proceeds from its sales of specified digital products and services are expended for educational purposes, and are therefore exempt from sales tax.

Date: 2020-12-04

Petitioner, a business that sells roofing materials to contractors in Iowa, inquired about whether its sales are subject to sales and use tax and LOST. Petitioner also inquired about whether pre-paid freight charges and additional transportation charges are subject to tax, as well as whether the department's LOST rules would be changed in the near future. The Director found that Petitioner's sales are subject to sales tax and are subject to LOST if the Iowa contractor takes delivery of the product in a jurisdiction that imposes LOST. The Director refused to answer the remaining questions based off lack of information and the question being inappropriate as a basis to issue an order.

Date: 2020-10-16

Petitioner, a Kentucky-based business that provides data and bill processing services for healthcare organizations, inquired about the taxability of its service charge for printing and mailing patient statements to the healthcare organization's clients. The Director refused to issue a declaratory judgment because the petition failed to provide the statutes and rules on which the Petitioner's inquiries were based and lacked sufficient factual circumstances in order for the Director to adequately respond to the inquiries.

Date: 2020-09-28

Petitioner, a utility company, inquired about the sales tax determination of a new inflow-outflow billing method established in Senate File 583. Specifically, Petitioner presented three sales tax scenarios (A, B, and C) and asked which tax scenario was applicable to the billing method set forth in SF 583. The Director found that the exchange of electricity for credits in dollars between Petitioner's customers and Petitioner is a trade-in under Iowa Code section 423.3(59), and therefore, the portion of the sales price credited to the customer is exempt from sales tax. Both sales tax scenario A and B considered the exchange a trade-in and the Director found that both scenarios are in compliance with the Code and the Department's administrative rules. Therefore, Petitioner may choose whether it will apply scenario A or B. Petitioner also inquired about the applicability of exemption certificates in the inflow-outflow billing method and the Director found that Petitioner is not required to provide exemption certificates to customers.

Date: 2020-09-28

Petitioner inquired about property tax on the purchase and sale of hotels and motels in Iowa. Specifically, Petitioner asked about personal property, goodwill, and special/use value exemptions from property tax and the reporting of those exemptions. The Director refused to issue the declaratory order because the Petition failed to substantially comply with the required form; the Petition did not contain facts sufficient to demonstrate that the Petitioner would be aggrieved or adversely affected by the failure of the Department to issue an order; the questions presented by the Petition were also presented in a contested case; the questions presented by the Petition would have more properly been resolved in a different type of proceeding or by another body with jurisdiction over the matter; the facts or questions presented in the Petition were unclear, overbroad, insufficient, or otherwise inappropriate as a basis upon which to issue an order; the Petition was not based on facts calculated to aid in the planning of future conduct, but was, instead, based solely upon prior conduct, in an effort to establish the effect of that conduct or to challenge a Department decision already made; and because the Petition requested a declaratory order on an issue presently in litigation in a contested case or court proceedings.

Date: 2020-09-28

Petitioner, a yoga studio franchisee, operates two yoga studios in Iowa and provides classes for its patrons. The classes Petitioner offers are led by instructors who are certified to teach yoga and who have at least 200 hours of training in yoga instruction. Petitioner’s customers are not permitted to use the facilities in a non-class setting or without instruction or supervision yoga instructor. Petitioner inquired whether the classes it offers its patrons are subject to Iowa’s sales tax. The Director found that, while yoga is “recreation” for purposes of Iowa Code section 423.2(6)(v), Petitioner’s service constituted nontaxable “instruction in recreational activities” under Iowa Administrative Code rule 701—26.24 because it meets the criteria laid out in that rule—namely, that the charges for instruction are separately contracted for; the instruction occurs under supervision and in a class setting; and the instructors, who are specially trained, impart the learner with the requisite level of knowledge or skill in the recreational activity being taught.

Date: 2020-08-31

Declaratory Orders

Any person may petition the Department for a declaratory order. For more detailed information about declaratory orders or how to file a petition, see 17A.9 Declaratory Orders and 701-7.24 (17A) Declaratory order-in general.

To view declaratory orders, cases, or rulings published by the Department, visit the Iowa Tax Research Library.