The Department is aware that sales and use tax permit holders that collect less than $1,200 in sales and use tax per year were changed to monthly filers on July 1, 2022. The Department reviewed these accounts and adjusted the filing frequency to annual. All affected taxpayers will be notified by mail of their current permit status, filing frequency, and instructions for filing the remainder of your 2022 taxes.
NOTE: If you file hotel and motel, automobile rental, or construction equipment excise taxes you must electronically file and pay monthly.
On June 17, 2022, Governor Reynolds signed a bill that changed filing and payment requirements for sales, use, and excise taxes in Iowa. The three key changes of this legislation include:
Sales and use taxes will be combined into one permit and filed using one return.
- All sales and use taxes will be filed on a single return. Separate returns for consumer’s use and retailer’s use taxes will no longer be used.
- If you have both a sales tax and use tax permit for your business location, the Department will cancel any unneeded permits for you. See below for more details.
Filing frequencies have changed for sales, use, and excise taxes.
- Taxpayers that collect less than $1,200 in sales and use tax per year will file returns and pay taxes annually.
- Taxpayers that collect $1,200 or more in sales and use tax per year will file returns and pay taxes monthly. All monthly filers are required to file and pay electronically.
- If you collect and remit most excise taxes, you must file a return and pay those taxes each month. This includes hotel and motel, automobile rental, and construction equipment. Water service excise tax will remain on a separate permit and return and can be either monthly or annual.
Deposit payments are no longer required.
- Payments are due only when a sales and use tax return is filed.
- You can continue to make deposit payments using GovConnectIowa, but it is not required by the Department.
What does this mean for you?
- If you have not already done so, create your GovConnectIowa logon today and request access to your tax accounts so you can file your return and pay tax on time. Quick Pay is available if you do not yet have a logon.
- The Department will mail a letter to all active tax accounts to alert taxpayers of their filing frequencies after these changes are made on July 1, 2022. You can also view your filing frequency and account status by logging into your GovConnectIowa account.
- Monthly filers will file a single tax return and make one payment for all sales and use tax collected each month, beginning with tax collected in July 2022. The return and payment for the July 2022 tax period is due August 31, 2022.
- Annual filers will file a single tax return and make one payment for all sales and use tax collected each year, due on January 31 of the following year.
- In January 2023, you will file a single tax return for all sales and use taxes collected in 2022. When filing the return, report any payments made in 2022 as deposit payments to ensure you do not pay those taxes twice.
Additional helpful information can be found by watching the Sales and Use Tax Changes video.