Sales & Use Tax

Following Governor Reynolds signature of House File 2128 on May 17, 2022, the Iowa Department of Revenue has released new guidance to explain this tax change, effective July 1, 2022, as it relates to the Iowa Fuel Tax Deduction for Blended Fuel Sales. This new deduction, added to Iowa Code section 452A.8, is intended to promote the use of biofuels by allowing a lower tax rate to be charged when the fuel is withdrawn from the terminal when it is known that the fuel is going to be blended into a biofuel with the lower tax rate after it

Following Governor Reynolds’s signature of Senate File 2367, the Department released updated guidance as it relates to Sales and Use Tax Permit, Return Filing, and Payment Changes. Changes to sales and use tax permit registration, return filing, and tax payment take effect July 1, 2022. These changes include:

At the time of a taxable purchase, Iowa state sales/use tax is collected by the retailer from the buyer. Unlike tangible personal property, which is subject to sales/use tax unless specifically exempted by Iowa law, services are subject to sales/use tax only when specified by Iowa law. Iowa sales tax is due when the first use of a taxable service occurs, or potentially could occur. The Iowa use tax complements the Iowa state sales tax. Generally, when a taxable service is purchased or obtained outside of Iowa for use in Iowa, it is subject to Iowa use tax.

The exempt status of the purchase of food is not solely determined by whether the food is eligible for purchase with Food Stamps. Many products are exempt from Iowa sales tax whether or not they are purchased with Food Stamps.

This guidance is intended as a general guide and is often considered a primary resource for contractors taxability. For additional details reference Iowa Administrative Rules Chapter 701-219.

The Information in this Publication Applies Only to Medical Clinics and Similar Businesses, Not to Nonprofit Hospitals or Hospices. It includes details regarding hospice and nonprofit Hospital exemptions, exempt sales/purchases, and taxable sales/purchases

This guidance provides an overall summary of information including details specific if you are an Employee, Independent Contractor (Self Employed), or Employer. Additionally there are details regarding returns/schedules to be filed, reporting income from tips, and what is subject to sales tax and Local Option Sales Tax.

This guidance is intended as a general guide. For additional details reference Iowa Administrative Code Chapter 701: Agricultural Rules. This is generally considered the primary resource for Farmers taxes.

Landscaping, lawn care, and tree trimming and removal services are subject to Iowa sales and use tax. Persons providing such services must obtain a sales tax permit and remit sales tax to the Department of Revenue. Snow removal services are not a taxable service in Iowa. Expand each topic for full details.

This guidance addresses the taxability of purchases of tangible personal property, specified digital products, and services common to the manufacturing industry. This page is a general guide and is not binding on taxpayers or the Department. Refer to relevant Iowa Code provisions and administrative rules cited throughout the webpage for binding guidance, interpretations, and examples. For issues not addressed in this guidance, contact Taxpayer Services at 1-800-367-3388 or 515-281-3114 or submit a request for tax guidance.