How much tax must I collect?
Iowa's state sales/use tax rate is 6%. Many cities and counties also have a 1% local option tax.
LOST
Is the local option tax charged with hotel/motel tax?
No. Room rental is not subject to local option tax, whether or not the rental is subject to hotel/motel tax.
Do pay television franchise fees imposed by a local jurisdiction exempt cable television charges from local option taxes?
No. Only franchise fees and users fees for natural gas and electric energy trigger the exemption.
What date controls whether local option tax applies?
Local option taxes, and state sales tax, on utility payments are imposed based on the “billing date.”
Are telephone credit card calls made outside a taxing jurisdiction and billed to an address within a taxing jurisdiction subject to local option tax?
Assuming that it is an intrastate call (within Iowa) local option tax applies if the call is billed to an address within a taxing jurisdiction.
How are utility payments taxed?
Delivery of gas and water occurs and the services of electricity, heat, communication, and pay television are rendered, furnished, or performed at the address of the subscriber who is billed for the purchase of this property or services. If that billing address is located in a local option taxing jurisdiction, the tax will apply.
How is local option sales tax computed on rented or leased property?
The general rule is that payments associated with periods when the property is used within a taxing jurisdiction are subject to local option tax. Motor vehicle, recreational vehicle and recreational boat rentals where state sales tax is imposed are subject to local option sales tax only if pursuant to the rental contract, possession of the vehicle or boat is transferred to the customer within the taxing jurisdiction and payment is made within the same taxing jurisdiction.
How does local option tax apply to services performed with a single contract both within an outside a taxing jurisdiction?
The local option tax is imposed if the first use of the service occurs, or potentially could occur, in the taxing jurisdiction.
Does it make any difference for local option tax if the service contract is signed outside the taxing jurisdiction?
No. Local option tax is due on all taxable services when the first use of the service occurs, or potentially could occur, in the taxing jurisdiction regardless of where the contract was entered into.
Does the date a contract for services was signed affect local option sales tax?
No. Sometimes services are contracted before the local option sales tax becomes effective. The tax still applies when the first use of the service occurs or potentially could occur.