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 past year. All orders from previous years can be found in the Iowa Tax Research Library

Administrative Orders

Petitioner, a contracting firm, requested a declaratory order to determine whether installation charges for qualified manufacturing equipment, either new or used, are required to be separately stated to be exempt from sales tax and whether one lump sum charge renders the total charge taxable or exempt. The Director found that under Iowa Code section 423.3(48) and Iowa Administrative Code rule 701—215.22, only the installation of new industrial machinery or equipment is exempt from sales tax. Further, if there is one lump-sum charge for both exempt and non-exempt equipment and installation, that amount would be subject to tax because the new equipment is not separately identified and charged.

Date: 2024-01-17

Petitioner, a franchise dealer operating a sauna studio business, requested a declaratory order to determine whether the use of the infrared saunas provided at Petitioner’s studio is a service subject to Iowa sales tax pursuant to Iowa Code section 423.2(6). The Director found that the services offered by Petitioner meet the definitions of 'commercial recreation,' 'Turkish baths,' and 'reducing salons.' As a result, those services are subject to Iowa sales tax pursuant to Iowa Code 423.2(6)(v) and (bg) and the applicable administrative rules. As such, Petitioner is required to collect and remit sales tax for those services.

Date: 2023-12-19

Petitioner, a franchise dealer, requested a declaratory order to determine whether cleaning and maintenance services provided by another entity, which is under audit, are taxable as janitorial services pursuant to Iowa Code section 423.2(6) and Iowa Administrative Code rule 701—211.37(423). The Director refused to issue a Declaratory Order because the question presented is the subject of an audit of another entity and an order would determine the legal rights, duties, or responsibilities of this third party. Furthermore, the question presented could be more properly resolved through other proceedings

Date: 2023-10-30

Taxpayer appealed an Administrative Law Judge’s (ALJ) decision upholding the Department’s denial of the taxpayer’s claim for refund of sales tax as the claim was filed after all of the limitation periods provided in Iowa Code section 423.47. After review, the Director affirmed the ALJ’s decision on the basis that the taxpayer’s claim was filed beyond all of the possible prescribed limitation periods stated in Iowa Code section 423.47 and the statute provides no authority to waive or grant exception to the stated limitation periods to allow for a refund.

Date: 2023-10-19

Petitioner, a health maintenance organization, is subject to Iowa's gross premium tax on insurance companies but does not pay the tax due to an exemption. Petitioner asks whether they are considered an insurance company as the term is used in Iowa Code section 422.34 which would exempt them from Iowa corporate income tax. The Director found that Petitioner is considered an insurance company as that term is used in Iowa Code section 422.34 and therefore, is exempt from Iowa corporate income tax.

Date: 2023-10-12

The taxpayer filed a motion to delete certain identifying details. The Director found that the taxpayer had not met the requirements for this motion as identified in Iowa Administrative Code rule 701-7.9(2), including the lack of an affidavit, evidence or other argument that the information requested to be deleted constituted an unwarranted invasion of personal privacy. Therefore, the motion was denied without prejudice.

Date: 2023-09-26

The taxpayer was assessed individual income tax and interest for underpayment of 2021 income tax. The Administrative Law Judge (ALJ) affirmed the Department’s assessment of additional, unpaid tax and interest. The ALJ agreed with the Department that the taxpayer was not exempt from Iowa individual income tax. The ALJ determined that taxes withheld by an employer are approximations of what is owed, but that taxpayers may ultimately owe more than the amount withheld and the Department may assess taxpayers when such an amount remains unpaid. Iowa Code § 422.16(1)(a). The ALJ held, further, that taxes are not consumer credit transactions, and the Department is not a “debt collector” within the meaning the applicable state and federal consumer protection statutes and that the Department's efforts to collect unpaid tax owed were proper. Iowa Code § 537.7102(3) & (5); 15 U.S.C. § 1692a(5). Finally, the ALJ noted that, while taxpayers may wish to direct how the specific dollars they pay in income tax are used by the state, the budgeting process is a function of the legislature and budgets, once adopted, are publicly available. Neither party appealed the proposed decision, and it became the Department's final order pursuant to Iowa Administrative Code rule 701-7.17(8)(d).

Date: 2023-09-26

The Administrative Law Judge held that the Department did not err in including social security payments in calculating Taxpayer’s income for purposes of determining rent- reimbursement eligibility. Therefore, the ALJ affirmed the Department’s denial of Taxpayer’s claim for rent reimbursement. Neither party appeal the proposed decision of the ALJ; therefore, it became the Department’s final order under Iowa Administrative Code rule 701-7.19(8)(d).

Date: 2023-09-26

Petitioner, a nonresident entity, entered into an agreement with an Iowa excursion gambling boat to run their online sportsbook, including serving as its withholding agent. Petitioner asked if it is required to withhold Iowa income tax on payments of sports wagering winnings. The Director found that Petitioner is required to withhold Iowa income tax on sports wagering winnings received by nonresidents, but not on sports wagering winnings received by Iowa resident pursuant to Iowa Code section 422.16.

Date: 2023-09-26