Iowa Administrative Code

203.4(1) An excise tax that is not an Iowa sales or use tax may be excluded from the sales price or purchase price of the sale or use of property or taxable services only if all of the following conditions exist: a. The excise tax is imposed upon the identical sales price on whic…

203.5(1) Trade-ins. a. When tangible personal property is traded toward the purchase price of other tangible personal property, the sales price shall be only that portion of the purchase price that is payable in money to the retailer if the conditions in paragraph 203.5(1)“b” are…

of tangible personal property includes a charge for installation of the personal property sold, the current rate of tax shall be measured on the entire sales price from the sale. The installation charges would not be taxable if the installation service is not an enumerated servic…

automatically and invariably results in the inclusion of a mandatory service charge to the total price for such food, beverage or meal, the amounts so included shall be subject to tax. The term “service charge” means either a fixed percentage of the total price of or a charge for…

property, services, or enumerated services includes consideration received by the seller from third parties. The following conditions shall apply: 203.8(1) The seller actually receives consideration from a party other than the purchaser, and the consideration is directly related …

a five-digit area when a nine-digit zip code cannot be used. Any database maintained by the department that displays tax rates and tax jurisdictional boundaries based on either a five-digit or nine-digit zip code system shall, if an area encompassing one zip code has two or more …

204.2(1) Definitions. “Entity-based exemption” means an exemption based on who purchases the product or who sells the product. “Product-based exemption” means an exemption based on the description of the product and not based on who purchases the product or how the purchaser inte…

model 1, 2, or 3 seller may submit its sales or use tax returns in a simplified format that does not include more data fields than permitted by the governing board. The department will require only one remittance for each return except as otherwise allowed by the agreement. If an…

bad debts owed to the seller and those bad debts consist of any sales price or purchase price upon which tax has been paid to the state of Iowa as well as a state or states other than Iowa, then allocation of the bad debt is allowed. The seller must support an allocation of the b…

overcollected sales or use taxes from the seller who collected them. More information is contained in Iowa Code section 423.45(2). In connection with any purchaser’s request of a seller that the seller return sales or use tax alleged to have been overcollected, the seller to whom…

taxability matrix in a database that is in a downloadable format approved by the governing board. All sellers and certified service providers are relieved from liability to Iowa and any jurisdiction imposing a local option tax under Iowa Code chapter 423B or 423E for having charg…

furnished. Certain taxable services are usually furnished over an extended period of time (e.g., utilities, janitorial, and ministorage services), and the user of such a service is billed at regular intervals (e.g., monthly or quarterly). The beginning date when a rate change is …

to these services. The determination of whether freight and other transportation charges are subject to sales or use tax is dependent upon the terms of the sale agreement. 204.8(1) Charges separately stated. When tangible personal property or a taxable service is sold at retail i…

definition as in Iowa Code section 423.1: “Agreement” means the same as defined in Iowa Code section 423.1. “Department” means the same as defined in Iowa Code section 423.1. “First use of a service” means the same as defined in Iowa Code section 423.1. “First use of a service pe…

agreement, retailers providing taxable services in Iowa shall source the sales of those services using the destination sourcing requirements described in Iowa Code section 423.15. In determining whether to apply the provisions of Iowa Code section 423.15 to the sale of a taxable …

205.3(1) First use of services performed on tangible personal property defined. A service performed on tangible personal property is a service that changes some aspect of the property, such as its appearance or function. Services with respect to tangible personal property, but no…

205.4(1) Definition. “Personal care services” means services that are performed on the physical human body. Examples of personal care services governed by this rule include, but are not limited to: a. Barber and beauty services; b. Massage, excluding services provided by massage …

Sales of tickets or admissions to places of amusement, fairs, and athletic events are sourced in the same manner as services, using the destination sourcing requirements described in Iowa Code section 423.15 and as set forth in rule 701—205.2(423). Generally, the sale of a servic…

sales of tangible personal property and specified digital products by sellers obligated to collect sales and use tax, except those enumerated in Iowa Code section 423.16, shall be sourced using the destination sourcing requirements described in Iowa Code section 423.15. Products …

to tax. For purposes of this rule, products include tangible personal property, services, and specified digital products and exclude real property and services to real property. [ARC 8153C, IAB 7/24/24, effective 8/28/24]

where the products are otherwise distinct and identifiable and the products are sold for one nonitemized price. 206.2(1) Distinct and identifiable product. “Distinct and identifiable product” does not include any of the following: a. Packaging or other materials that accompany th…

from a bundled transaction is subject to sales tax. However, the transactions described in this rule are not taxable as bundled transactions. 206.3(1) Sales involving mixed tangible personal property and services. The retail sale of tangible personal property or a specified digit…

207.1(1) Incorporation of definitions. To the extent they are consistent with Iowa Code chapter 423 and this chapter, all other words and phrases used in this chapter mean the same as defined in Iowa Code sections 423.1 and 423.14A and rule 701—200.1(423). 207.1(2) Chapter-specif…

retailer is registered to collect Iowa sales tax and applicable local option sales tax and collects in year 1 and fails to meet or exceed the sales threshold in year 2, the retailer must still collect all applicable sales taxes in year 2. If the retailer does not meet or exceed t…

offered by marketplace facilitators and remote sellers are retailers’ discounts, which reduce the sales price and thus the taxable amount of a sale. The requirements of rule 701—213.10(423) apply to marketplace facilitators and remote sellers in the same manner that those require…

207.12(1) If a marketplace facilitator collects Iowa sales tax and applicable local option sales tax on the sale and the customer returns the item directly to the marketplace seller, either the marketplace facilitator or marketplace seller shall refund the full price paid by the …

207.13(1) Exempt sales. A retailer required to collect and remit Iowa sales tax and applicable local option sales tax in accordance with Iowa Code section 423.14A and this chapter is responsible for correctly applying exemptions for tangible personal property, specified digital p…

marketplace facilitator is not obligated to collect tax on a product sold through a marketplace it operates that is not subject to Iowa sales and use tax. Example: A marketplace facilitator allows marketplace sellers to list for sale vehicles subject to registration under Iowa Co…

chapter, the requirements of 701—Chapter 11 apply to all retailers, including remote sellers and marketplace facilitators, required to collect and remit sales tax under this chapter. [ARC 7621C, IAB 2/7/24, effective 3/13/24]

202. Except as otherwise stated in this chapter, the filing requirements of 701—Chapter 202 apply to all retailers, including remote sellers and marketplace facilitators, required to collect and remit sales tax under this chapter. [ARC 7621C, IAB 2/7/24, effective 3/13/24]

chapter, the permit requirements of 701—Chapter 201 apply to all retailers, including remote sellers and marketplace facilitators, required to collect and remit Iowa sales tax and applicable local option sales tax under this chapter. [ARC 7621C, IAB 2/7/24, effective 3/13/24]

207.5(1) Sales threshold inapplicable. The sales threshold does not apply to any seller, marketplace facilitator, or other retailer that has physical presence in Iowa. A seller, marketplace facilitator, or other retailer with physical presence in Iowa must collect and remit Iowa …

207.6(1) Combined Iowa sales from all sources. The sum of the total amount of Iowa sales through marketplace and nonmarketplace Iowa sales determines whether remote sellers meet the sales threshold. 207.6(2) Remote sellers with Iowa sales solely through marketplaces. If a remote …

facilitator that meets the sales threshold must collect and remit Iowa sales tax and applicable local option sales tax on all taxable sales made through the marketplace facilitator’s marketplace that are sourced to Iowa. A marketplace facilitator must collect Iowa sales tax on al…

tangible personal property, a specified digital product, or a service on a marketplace when merely advertising that product on a marketplace. [ARC 7621C, IAB 2/7/24, effective 3/13/24]

207.9(1) Commencement of collection obligation. If a remote seller or marketplace facilitator without physical presence in Iowa did not exceed the sales threshold for the prior year and therefore does not collect sales tax in the current year, and exceeds the sales threshold in t…

written contract with the department to collect and remit state and local option sales taxes on sales of tangible personal property and specified digital products to independent distributors for resale and remit the taxes directly to the department. To be eligible for the multile…

chapter or any multilevel marketer agreement and notwithstanding whether a multilevel marketer agreement is entered between a person and the department, multilevel marketers and independent distributors may have an obligation to collect Iowa sales tax and any applicable local opt…

209.1(1) General provisions. A valid exemption certificate, whether furnished by the department or a seller, must be fully completed, dated, and signed if a paper certificate is used. a. A fully completed exemption certificate must include the following information: (1) Name of b…

209.2(1) Use of fuel exemption certificates. The use and acceptance of fuel exemption certificates must comply with Iowa Code section 423.45(5). For purposes of this subrule, terms mean the same as defined in Iowa Code section 423.45(5). 209.2(2) Necessary information. A fuel exe…

wholesaler holding a Class A or F permit has been purchased for resale if the purchaser provides the wholesaler with a retail beer or wine permit or liquor license number. A wholesaler’s record of account with an individual retailer is a complete and correct exemption certificate…

program: “Assessment” means the determination of a past due tax obligation and includes self-assessments. An assessment includes the Iowa income tax, interest, penalties, fees or other charges associated with the past due legally enforceable Iowa income tax obligation. “Departmen…

must be met before the state can request an offset of a federal overpayment against an Iowa income tax obligation: 21.2(1) The state must have made written demand on the taxpayer to obtain payment of the state income tax obligation for which the request for offset is being submit…

evidence that all or part of the debt is not past due or not legally enforceable or that the address shown on the taxpayer’s federal return that resulted in the overpayment is not within Iowa. The challenge must be postmarked or received within 60 days of the date of the pre-offs…

evidence by the department from the taxpayer, the department will notify the taxpayer in writing whether the evidence submitted is sufficient to terminate the intended offset. If the department determines that the evidence is sufficient, the procedure to initiate the federal offs…

purchaser for use or consumption by the purchaser or in the purchaser’s business and not for resale are considered retail sales and subject to tax, even if sales are made at wholesale prices or in wholesale quantities. This rule is intended to implement Iowa Code section 423.2(1)…

property to dentists and dental laboratories. Such dental supply houses shall collect and report all tax due from purchasers in all transactions involving taxable retail sales. This shall not include sales of tangible personal property that will form a component or integral part …

distributors engaged in intrastate sales of magazines and periodicals in Iowa to vendors that are engaged in part-time distribution of such magazines are deemed to be making sales at retail. The sales price of such sales shall be subject to sales tax. This rule is intended to imp…

subscription magazines or periodicals derived by independent distributors or dealers in the state of Iowa that secure such subscriptions as independent dealers or distributors shall be subject to tax. This rule is intended to implement Iowa Code section 423.2. [ARC 8155C, IAB 7/2…

personal property or specified digital products in connection with its finance business and sells tangible personal property or specified digital products at retail in Iowa shall be required to hold a permit and remit the current rate of tax on the sales price of such sales at re…