IDR State Tax Reform Guidance: Taxation of Digital Products & Services

In 2018, the Iowa legislature enacted Senate File 2417, a state tax reform bill that includes extensive changes to the state’s tax structure. The Department has released new guidance to explain the following tax change:

• Taxation of Specified Digital Products, Software, & Services - Beginning January 1, 2019, digital goods or service may be subject to sales tax, applicable local option sales tax, and use tax, depending on various factors. This guidance explains what is subject to tax including computer software, specified digital products including webinars, the sale of storage services, and information services. Additionally, this guidance provides further information regarding exemptions to taxation.

This information was sent via GovDelivery to those subscribed to receive Law & Policy updates from the Department. Guidance is updated as it becomes available to the tax reform page to provide taxpayers with information on tax reform topics. To receive notifications of resources and guidance issued by the Department, subscribe to updates by selecting the tax topics of interest.