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Declaratory Order - Syverson, Strege, and Company

Docket No. 07-30-6-0209

On January 28, 2008, the Director issued a Declaratory Order in a response to a Petition requesting a determination of whether the gross receipts from a new service offered by the Petitioner called “business coaching” is to be considered the enumerated service of “investment counseling” and subject to Iowa sales tax. The business coaching service focuses on identifying peoples' skills. To perform this service, the Petitioner learns personal and company objectives of a client and he creates a plan that will enable the client's objectives to be achieved. To obtain objectives and create the plan, the key executives, business owners and family members of the client are interviewed. In addition, the Petitioner tests and profiles those interviewed to ascertain how each person learns and communicates the most efficiently. The Petitioner also ascertains the roles and responsibilities of managers, owners and family members to determine position descriptions. The Petitioner also helps the client to set up operating plans to provide the most financially efficient means in which to operate the client's company. In addition, the Petitioner also reviews the company pay plan to determine the most effective incentive pay program for key employees that will produce higher performance of the employees and better overall financial performance for the business.

The Petitioner's service is a form of counseling, but not a form of “investment counseling” as intended under Iowa Code section 423.2(6)(2007) and as defined in department rule 701 IAC 26.7. As a result, the gross receipts from the Petitioner providing this service is not subject to Iowa sales or use tax.