Beginning January 1, 2019, under Iowa Code section 423.2(6)(bq), the sale of storage services for tangible or electronic files, documents, and other records are subject to Iowa sales tax and applicable local option sales tax. Storage of household goods, mini-storage, and warehousing of raw agricultural products were taxable prior to January 1, 2019 and remain taxable.
Storage of tangible files, documents, and other records includes storage for any length of time and for any purpose, regardless of whether the purchaser has access to an individual storage unit or not. Examples of such services include physical archive storage, title or abstract storage, etc.
Storage of electronic files, documents, and other records includes the storage of any specified digital product. Electronic storage services often involve providing customers with remote access to servers that store content, data, applications, software, and other electronic files for safekeeping and retrieval at a later time. Such services are taxable regardless of the length of time the storage occurs or the size or quantity of the service. Examples of taxable electronic storage services include cloud storage and storage on computers, hard drives, and servers, etc.
Exemptions found in 423.3 may apply to sales of tangible or electronic files, documents, and other records. This includes the exemption for sales to qualifying commercial enterprises for commercial purposes, as defined in Iowa Code section 423.3(104). This commercial enterprise exemption does not apply to storage of household goods, mini-storage, and warehousing of raw agricultural products. The current Iowa Sales Tax Exemption Certificate can be found on our website.
The Department issued a Declaratory Order to Amazon Web Services, Inc. The Order addresses whether certain services provided by Amazon Web Services, Inc. constitute electronic storage of files, documents and other records. The Declaratory Order can be found on the Iowa Tax Research Library.