What happens with local option tax when a business uses its own inventory?

LOST
Sales Tax

If a retailer located in a taxing jurisdiction purchases items for resale or processing and later withdraws them from inventory for other purposes, the local option tax for the jurisdiction where the items are withdrawn from inventory is imposed. It does not matter where or when the items were first purchased.

Owners, contractors, subcontractors, or builders purchasing building materials, supplies, and equipment for use in a construction project must pay local option sales tax on these items if they take delivery in a taxing jurisdiction.

Contractors, subcontractors, or builders who are also retailers located in a taxing jurisdiction must pay local option tax when they withdraw building materials, supplies and equipment from their resale inventory for construction projects in Iowa, even if the construction project is outside the taxing jurisdiction.

Manufacturers of building materials located in a taxing jurisdiction who are principally engaged in manufacturing and selling building materials and who withdraw them from inventory for use in a construction contract must pay local option tax if the construction contract is within Iowa. The tax is computed on fabricated cost. They must pay local option tax when they withdraw building materials, supplies and equipment from inventory for construction purposes even if the construction project is outside the taxing jurisdiction.