Iowa Administrative Code

and forks; and straws. When paper or plastic cups, plates, and dishes, paper napkins, and wooden or plastic spoons, forks, and other utensils are sold with food or other items to a buyer, and the buyer uses or consumes the utensils, sales of those utensils to retailers are consid…

Services are exempt from tax when used in the reconditioning or repairing of tangible personal property of the type that is normally sold in the regular course of the retailer’s business and that is held for sale by the retailer. Example 1: A owns a retail appliance store and con…

service. 225.3(1) In general. a. Tangible personal property purchased by a person engaged in the performance of a service is purchased for resale and not subject to tax if (1) the provider and user of the service intend that a sale of the property will occur, and (2) the property…

225.4(1) Chemicals, solvents, sorbents, and reagents. Sales of chemicals, solvents, sorbents, or reagents directly used and consumed in the maintenance or repair of fabric or clothing are exempt from tax. This rule’s exemption is mainly applicable to dry-cleaning and laundry esta…

225.5(1) Leases. The rental of tangible personal property is treated as the sale of that property for the purposes of Iowa sales and use tax law because “leases” and “rentals” of tangible personal property are taxable retail “sales” of that property. The rental of tangible person…

the sale of water, electricity, chemicals, solvents, sorbents, or reagents to a retailer to be used in providing a service that includes a vehicle wash and wax that is subject to Iowa Code section 423.2(6) is exempt from tax. 225.6(1) Definitions. For the purposes of this rule, t…

225.7(1) Exemption. The sales price from the sale of specified digital products and of prewritten computer software sold, and of enumerated services described in Iowa Code section 423.2(1)“a”(5) or 423.2(6)“bq,”“br,”“bs,” and “bu” furnished to a commercial enterprise for use excl…

“Delinquent debtor” means an individual, corporation, limited liability company, business trust, estate, trust, partnership, or any other legal entity that owes a delinquent liability, or unpaid taxes to the state or a liability that is collectible by the state. “Department” mean…

delinquent liabilities owed to the state, and liabilities collected by the state. A homestead may be sold to satisfy delinquent taxes collected under Iowa Code section 422.26 and any other similar section, with the written authorization of the director. However, a homestead will …

453A, 453C, 453D, and 453E. In addition, as used in this title, the following definitions apply: “Permit” means any permit or license issued under Iowa Code chapter 453A. “Permittee” means any person holding or required to obtain a permit or license of any kind under Iowa Code ch…

230.2(1) Generally. Every taxpayer shall keep, preserve, and make available to the department records for a period of at least three years. The following is a nonexhaustive list of records that are subject to the provisions of this rule. 701—Chapter 11 provides more information f…

chapter 453A or these rules, at minimum, it must contain the following information: 1. Seller’s name and address. 2. Purchaser’s name, address, and permit number (if any). 3. Date of sale. 4. All prices and discounts stated separately. 5. An indication as to whether cigarettes or…

230.5(1) Applications for permits in general. The application forms for all permits issued under Iowa Code chapter 453A are available from the department. Each application must include the following information: a. Nature of the applicant’s business; b. Type of permit requested; …

230.6(1) Revocation by the department. Any permit revocation by the department under Iowa Code chapter 453A and this rule is subject to the requirements of rules 701—7.19(17A) and 701—7.39(17A). 230.6(2) Delinquency. a. The department may revoke the permit of any permit holder wh…

230.7(1) Inventory. All persons required to obtain a permit under Iowa Code section 453A.13 and 453A.44 as distributors shall take an inventory of all cigarettes and little cigars in their possession prior to delivery for resale upon which the tax stamp or metered imprint has bee…

453A, 453C, 453D, and 453E and rule 701—230.1(453A). This rule is intended to implement Iowa Code chapters 421B, 453A, 453C, 453D, and 453E. [ARC 9039C, IAB 3/19/25, effective 4/23/25]

231.10(1) Delivery sale permit for out-of-state retailers. An out-of-state retailer that has applied and otherwise qualifies for a delivery sale permit will be issued the permit for the retailer’s principal place of business. 231.10(2) Sales and use tax permit. A retailer holding…

untaxed cigarettes within the state of Iowa must first obtain the appropriate permit. 231.2(1) Distributor’s permit. If a distributor performs any other function that requires a permit, a separate permit must be obtained. If a person is not performing the functions of a distribut…

231.3(1) The amount of the bond required for each permit shall be as follows: a. Distributor permit: $2,500. b. Wholesaler permit: $2,500. c. Vendor permit: $1,000. d. Railway car retail permit: $500. e. Manufacturer permit: $5,000. f. Distributing agent permit: $2,500. g. Retail…

231.4(1) Attachment. The fact that the tax is eventually paid will not relieve the person’s standing prior in the chain of distribution of the sanctions for distributing untaxed cigarettes if the tax should have been paid sooner by said person. 231.4(2) Exclusivity of tax. No oth…

231.5(1) Purchase of stamps from the department. The stamps shall be sent to the purchaser through the United States Postal Service by registered mail or similar delivery service at the department’s expense. The purchaser may request alternate methods of transmission, but such me…

231.6(1) Authorization. The director has the discretion to allow the sale or distribution of stamps through authorized banks as defined in Iowa Code section 524.103. The authorization of a bank to sell stamps is not a mandatory direction but may be utilized by the director to enh…

cigars.” 231.7(1) In-state distributors not exporting cigarettes. Every distributor with a place of business in Iowa where cigarettes are stamped and that is not engaged in exporting cigarettes from this state shall submit any forms required by the department. a. All required for…

231.8(1) Free samples. Iowa Code section 453A.39 provides an exclusive method for manufacturers to distribute free sample packages of cigarettes or little cigars. In addition to the requirements under Iowa Code section 453A.39, the cigarettes or little cigars must also be clearly…

This rule is intended to implement Iowa Code sections 453A.6, 453A.7, 453A.8, 453A.10, 453A.28, and 453A.35. [ARC 9039C, IAB 3/19/25, effective 4/23/25]

This rule is intended to implement Iowa Code section 453A.44. [ARC 9040C, IAB 3/19/25, effective 4/23/25]

453A, 453C, 453D, and 453E and rule 701—230.1(453A). This rule is intended to implement Iowa Code chapters 421B, 453A, 453C, 453D, and 453E. [ARC 9040C, IAB 3/19/25, effective 4/23/25]

in the state are responsible for paying the amount of tobacco tax due on those samples and filing a return. The tax due is based on the usual wholesale price of these products. This rule is intended to implement Iowa Code sections 453A.43, 453A.46, and 453A.49. [ARC 9040C, IAB 3/…

232.11(1) Sales to the federal government. a. Military post exchanges or instrumentalities of the federal government are not required to comply with the provisions of Iowa Code chapter 453A or pay the tax imposed thereunder. b. Individuals who have purchased or obtained tobacco p…

232.2(1) Generally. If the person holds a valid cigarette permit of any kind, the permit will be issued without cost if all other requirements for the permit are met, but the permit must still be obtained. A tobacco retailer is required to obtain a retail cigarette/tobacco permit…

232.3(1) Generally. A bond in the amount of $1,000 is required to be posted before a distributor’s permit can be issued, regardless of whether or not the distributor is permitted and bonded as a cigarette permittee. 232.3(2) Aggregation. If the distributor has a cigarette permit …

232.4(1) Generally. The tax on tobacco products is to be paid once, either upon distribution by a distributor or upon use or storage by a consumer. The tax is in addition to any occupation or privilege tax or permit fees imposed by any city or county. 232.4(2) Distributor respons…

payment method, reporting, and affixing of stamps apply equally to little cigars, as defined in Iowa Code section 453A.42. The tax on little cigars is to be paid on the purchase of stamps by cigarette distributors or cigarette manufacturers who hold valid permits. This rule is in…

232.6(1) Generally. Every distributor permitted under Iowa Code section 453A.44 must file monthly returns. a. Due date. Returns are due no later than the 20th day of the month following the month covered by the return. For example, a return covering the month of May 2025 would be…

manufacturers, or exported are provided for in subrule 232.6(1). If the credits exceed the average monthly tax liability of the distributor, based upon the prior 12 tax periods, a refund may be issued. Credits and refunds to a consumer who paid the tax pursuant to Iowa Code secti…

232.8(1) Generally. Consumers or any person who is not a permitted tobacco distributor who obtains or possesses tobacco products on which the tax under Iowa Code section 453A.43 has not been paid is responsible for reporting and remitting tax on those tobacco products. Consumers …

232.9(1) Generally. All transportation of tobacco products into this state is to be reported to the director within 30 days of the importation. 232.9(2) Reports. Reports are to include but not to be limited to the following information: a. Description of the products imported, b.…

defined in Iowa Code section 421B.2. This rule is intended to implement Iowa Code section 421B.2. [ARC 9041C, IAB 3/19/25, effective 4/23/25]

233.2(1) Cost to retailers or cost to wholesalers. The “cost to the retailer” and “cost to wholesaler” are defined in Iowa Code section 421B.2. The formulas for determining the cost to a wholesaler or retailer are not conclusive. The retailer, wholesaler, or the department may pr…

233.3(1) Additional items sold with cigarettes. Whenever cigarettes and another item are offered for sale at a total combined price, the sales price shall not be lower than the “cost to wholesaler” or “cost to the retailer” of all articles sold. The “cost to wholesaler” or “cost …

coupons were supplied to consumers by manufacturers and will be redeemed from the retailers by the manufacturers, does not affect the minimum sales price of cigarettes. The retailer is still receiving the statutory minimum price even though that price is paid by two different per…

233.5(1) Promotions using cigarettes, noncigarettes or coupons generally. Promotional situations are specifically covered by Iowa Code section 421B.4. A promotional situation as described in Iowa Code section 421B.4 is valid provided it is a promotion scheme complying with the pr…

to the retailer” and the “cost to wholesaler,” all manufacturers dealing with Iowa permittees shall notify the department in writing within five working days of the effective date of any change in the manufacturer’s list price for cigarettes. This rule is intended to implement Io…

233.7(1) Civil penalties. Violations of Iowa Code chapter 421B and this chapter will result in penalties as identified in Iowa Code section 421B.3. 233.7(2) Permit revocation or suspension generally. The department may revoke or suspend any permit issued under Iowa Code chapter 4…

234.1(1) Purpose. In 1998, the state of Iowa joined a multistate agreement with cigarette manufacturers called the Master Settlement Agreement (MSA). Subsequent to entering into that agreement, in 1999 the Iowa general assembly enacted Iowa Code chapter 453C that requires the dep…

234.2(1) Filing. A report must be filed by tobacco products distributors, cigarette distributors, and persons who sell tobacco products at retail that were purchased from a person who is not required to file a distributor report. 234.2(2) Annual reporting. The report must be file…

person who is not required to file a report required by this chapter, and every tobacco products distributor and cigarette distributor subject to this reporting rule, must maintain complete and accurate records and underlying documentation for five years to support the data requi…

information filed pursuant to rule 701—234.2(453C) to the attorney general for use in enforcing compliance with Iowa Code chapter 453C. [ARC 9042C, IAB 3/19/25, effective 4/23/25] These rules are intended to implement Iowa Code chapter 453C. DIVISION II TOBACCO PRODUCT MANUFACTUR…

234.5(1) Purpose. Violations of Iowa Code chapter 453C threaten the integrity of the tobacco MSA, the fiscal soundness of the state, and the public health. In 2003, the general assembly enacted Iowa Code chapter 453D to establish procedural enforcement enhancements to aid in the …

234.6(1) Directory of cigarettes approved for stamping and sale in Iowa. a. A tobacco product manufacturer and a brand family shall not be included in the directory authorized by Iowa Code section 453D.3 after April 30 each year until and unless the tobacco product manufacturer h…