Storage of tangible or electronic files, documents, and other records
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. View the Storage of Tangible or Electronic Files, Documents, or Other Records page for more information about these types of storage services.
An information service is a service where access to a database or any form of subscription to information is provided through any tangible or electronic medium. Some examples of information services include the following:
- Database files
- Research databases
- Genealogical information
- Mailing lists
- Subscription files
- Credit reports
- Real estate listings
- Bond rating reports
- Abstracts of title
- Bad check lists
- Broadcasting rating services
- Wire services
- Price lists or guides
- Scouting reports
Software as a Service
Software as a service means the sale, storage, use, or other consumption of vendor-hosted computer software, such as software accessible on the cloud. “Vendor-hosted computer software” means computer software that is accessed through the internet or a vendor-hosted server whether the access is permanent or temporary, whether any downloading occurs, or whether the software is hosted by the retailer of the software or by a third party. The content or material accessed by way of software as a service does not impact the taxability of the software itself.
Services arising from or related to installing, maintaining, servicing, repairing, operating, upgrading, or enhancing specified digital products are also subject to tax.
Video game services and tournaments
Video game services means providing access to video games, support and account services, in-game currency exchanges, payment processing services, and any other service related to the hosting or provision of video games. A “video game” is any virtual, digital, or electronic game in which a user interacts with a user interface to generate visual feedback on a video device such as a computer monitor, television screen, or mobile device. Video games may be transferred through any physical or electronic medium, including by cartridge, disc, or electronic file, or through access to any server or network of servers.
Video game tournaments are events where participants compete in the playing of video games. Participants may be physically present in the same location or may be playing video games remotely. Participation in such tournaments are taxable regardless of whether or not a prize is provided to any participants. Taxable services relating to “video game tournaments” include fees paid for participating in such tournaments and related services.
“Web hosting” is not defined by the Iowa Code or existing rule, but it is generally understood as an online service that allows users to publish their website files onto the internet to make the website available for public access. The Director has previously determined that web-based storage is taxable as “storage of tangible or electronic files, documents, or other records”, a taxable service in Iowa Code section 423.2(6)(bq) (see Amazon Web Services, Inc. (2018). However, web hosting in its traditional sense is focused on the publication of the data and not its mere storage.
Web hosting is also not an otherwise enumerated service when provided in a traditional, stand-alone manner. Some additional cloud-based services may include web hosting, but those services are generally considered “infrastructure as a service (IaaS).” Iowa law only imposes tax on “software as a service” (SaaS). Thus, web hosting is not a taxable service in Iowa.