1. IOWA SALES / USE TAX BASICS PART 1
Terry O’Neill
Taxpayer Service Specialist

2. Sales Tax
Use Tax
Just what is
the Difference?

3. Sales Tax Sale is made from an Iowa location and
Delivery of product occurs in Iowa or
Service is performed in Iowa

4. Sales Tax COLLECTED by the RETAILER PAID by the FINAL CONSUMER
REMITTED to the State by RETAILER

5. Use Tax Requires
Out of State Vendor
and
Iowa Purchaser

6. Use Tax May be Collected by the Retailer or
Paid to the State by the Purchaser

7. What is Taxable? All tangible personal property unless
a specific exemption has
been written into Iowa Law.

8. Tangible Personal Property
Taxation is the Rule
for
Tangible Personal Property

9. Exemption is the Rule
for
Services
Unless listed in Iowa law

10. Which Services are Taxable?
List of taxable services on our website:

12. Common Taxable Services
Appliance / Machine Repair
Barber / Beauty / Cosmetology
Carpentry
Electrical Repair / Installation
Janitorial / Cleaning / Building Maintenance
Lawn Care / Landscaping / Tree Trimming & Removal
Painting / Papering / Interior Decorating
Pet Grooming
Photography (sale of tangible personal property)
Plumbing
Vehicle Repair

13. Barber / Beauty / Cosmetology
Hair cutting / styling / coloring
Manicuring & pedicuring
Applying facial & skin preparations
Hair removal
Wig care
All other similar activities to enhance
the appearance of the individual

14. Janitorial / Cleaning / Building Maintenance
Includes:
Window washing
Floor cleaning, vacuuming, and waxing
Cleaning of walls and woodwork
Cleaning of restrooms
Does Not Include:
Services performed in a private residence, including apartment or multiple housing unit
and the person paying for the services is an
occupant of the residence

15. Lawn Care / Landscaping / Tree Trimming & Removal
Mowing
Trimming
Watering
Fertilizing
Seeding
Sodding
Killing insects, moles,
weeds, or fungi

16. Lawn Care / Landscaping / Tree Trimming & Removal
Excavating
Planting
Pruning
Placing sand,
rock, wood chips

17. Lawn Care / Landscaping / Tree Trimming & Removal
Trimming or removing
any part of a tree or shrub
Branches
Trunk
Stump

18. Painting / Papering / Interior Decorating
Painting Includes:
Surface preparation
Covering interior or exterior surfaces
of tangible personal property or real property with:
coloring matter and mixture of pigment or sealant
some suitable liquid to form a solid adherent
when spread on in thin coats
For decoration, protection or preservation purposes
Painting Does Not Include:
Automobile undercoating
Coating of railroad cars or storage tanks
Plating of tangible personal property with metals
like chromium, bronze, tin, galvanized metal, or platinum

19. Pet Grooming Includes: Washing Combing Currying Hair cutting
Nail clipping
Does Not Include:
Livestock grooming
Grooming as an integral part
of veterinary care

20. Photography
Treated as the sale of a product (tangible personal property) not as a service.
Charges to obtain the product are taxable
Finished photograph itself
Additional charges to create
the photograph(s) e.g. “sitting fees”
Does not include separately stated
transportation charges
Products delivered electronically are not
subject to tax
Point of delivery determines where tax applies

21. Vehicle Repair Repair includes fixing or renovating existing
parts and replacing defective parts
Motor
Engine
Accessories
Body
Interior
Does not include installation
of new parts or accessories which
are not replacements

22. Exemptions for Services
Performed on or connected with
new construction, reconstruction
alteration, expansion, or remodeling of a building or structure
Performed for an employer
Purchased for resale
Recondition or repair tangible personal property when that property is normally sold in the regular course of the retailer’s business

23. What’s the Tax Rate? 1% Local Option Sales Tax (LOST)
6% State Sales/Use Tax
1% Local Option Sales Tax (LOST)

24. Important Rule
Tax Cannot be Absorbed by
Nor Paid by- The Retailer

25. Sales Tax can be Included in Total Sales Price
…if posted

26. Iowa Tax Permits Retail Sales 1-85-000000 Retailer’s Use 2-00-000000
Consumer’s Use
Direct Pay

27. Do I Need an Iowa Sales Tax Permit?
Located in Iowa? Yes.
AND
Makes taxable sales in Iowa? Yes.
You need an Iowa sales tax permit.

28. Iowa Sales Tax Permits Illegal to make taxable sales without a permit
Each retail location must have its own permit
File Returns
Individual
Request Consolidated

29. How Do I Apply for a Permit?
Complete the Department’s Business Tax Registration form online at:

31. Do I Need to Renew Every Year?
No.
Once issued, a permit is effective until it is cancelled by the retailer or revoked by the Iowa Department of Revenue

32. How Often and When Do I File?
Filing frequency is based on how much tax you expect to collect.
Indicate this amount on your application when you register for your permit.

33. Filing Frequency Requirements
Iowa Sales Tax
Filing Frequency Requirements
Semi monthly
Monthly
Quarterly
Annually
$5,000 per month
Under $5,000 per month
Under $500 per month
Under $120 per year

34. Filing Returns & Making Payments
Iowa sales & use tax returns are filed electronically through the Department’s online service eFile & Pay. You will always need your BEN, User ID, Password

37. Some Key Reminders Statute of Limitations is 3 years
Tax permits do not need to be posted
Iowa has no “exempt numbers”
Permits are not a license to buy exempt

38. Tangible Personal Property and Services
Always Exempt
Anything Purchased for Resale
Tangible Personal Property and Services

39. Always Exempt Sales Into Interstate Commerce Freight Handling Shipping
Transportation Trip Charges

40. Exemption Certificates

41. Exemption Certificates

42. Resources

45. Receive Automatic Updates

46. Subscribe to the Following Topics
Newsroom
Tax Information
eFile & Pay Information
Sign-up for Due Date Reminders
Economic, Fiscal, & Statistical Information
Electronic Filing
NOTE: These replace the eLists formerly used

47. Follow Us on Twitter
@IDRBusinessTax
@IDRIncomeTax
@IDRTaxPros

48. Like Us on Facebook

49. Need More Information?
More details can be found on our website: Iowa Sales and Use Tax Guide
Call us: 8 a.m. - 4:15 p.m. CT /
us at

50. Protect Yourself from Identity Theft
IDR will always identify itself.
We will NEVER ask you to provide your full Social Security Number by or regular mail.
We do not send s asking for personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.

51. Protect Yourself from Identity Theft
If you are unsure the communication you received is official:
Do not provide any personal or confidential information.
Contact us. We will confirm whether the communication you received was from the Iowa Department of Revenue.

52. Purpose of this Presentation
This presentation is intended for general educational purposes only.
Anyone involved in an audit or protest must contact the Department representative they are working with on that issue.

53. Thank You!!