message from the director:
Thanks for taking time to
review this latest edition of the Iowa Department of Revenue's Tax
eNews publication. Our goal with this publication is two-fold. First,
we hope to share information that is truly useful to you as a taxpayer
and/or a practitioner. Second, and just as importantly, we use it as
a tool to seek your advice, counsel, questions, or comments about IDR
As for sharing information,
you'll note several references to the department's new eFile & Pay
program. Many of you already know about the program and the objective
of providing total electronic interaction with the department at YOUR
convenience. The program started at the beginning of the year with
implementation of electronic filing and payments related to withholding
returns. The next phase kicks off July 5 with electronic applications
related to sales and retailer's use tax.
We've received lots of feedback
related to the eFile & Pay program. As you can imagine, it has
been mixed; some folks love it and some folks hate it. The negative
comments have decreased over time to the point that there appears to
be great acceptance of the program among Iowans. For that we thank
you. Still, know that we want to hear from you. Should you need assistance
or wish to make suggestions, you can e-mail
the department or call (866) 503-3453 toll free.
So, you'll find information
about eFile & Pay, and other issues, in this edition of Tax eNews.
Let me close by again encouraging you to let us hear from you.
Thank you in
advance for your comments and your suggestions,
eFile & Pay
to begin July 5 for sales and retailer's use taxes
Every effort is being made
to reach permit holders who file these Iowa taxes. In May, our department
mailed a letter to
each permit holder, notifying them of the upcoming change. The media
assisted us in educating the public and businesses after our press
conference in June. In addition, a news release was
sent to all media statewide and to Chambers of Commerce and business
and professional organizations.
In July, letters will be sent
once again, this time with important information on accessing eFile & Pay.
Our tax specialists will hold meetings statewide to explain the electronic
process and answer questions.
information is available on our Web site.
note: The quarterly return for the second quarter
of this year is not required to be filed through eFile & Pay,
although it can be. You may use the preprinted paper return you
received from the department for the second quarter and begin using
eFile & Pay for periods after July 1.
Sales Tax Holiday
The 2005 Sales Tax Holiday
will be held Friday and Saturday, August 5 and 6. Complete information
about the Holiday can be found online.
the following changes.*
A layaway sale is a transaction
in which merchandise is set aside for future delivery to a customer
who makes a deposit, agrees to pay the balance of the purchase price
over a period of time and at the end of the payment period, receives
Eligible items will qualify
for the exemption if the customer:
- takes delivery of the merchandise
during the exemption period or
- puts the merchandise on
layaway, even if final payment and delivery is not made until after
the Sales Tax Holiday
Eligible items purchased by
mail order, catalog or Internet will be exempt if they are:
- delivered during the exemption
- ordered and paid for during
the exemption period, even if delivery is made after the Sales Tax
inserts and laces are exempt , not taxable.
Option Sales Taxes
New jurisdictions are being
added July 1 in both school local option tax and regular local option
landscaping subject to Iowa sales tax
A reminder that lawncare
and landscaping services performed in Iowa are subject to sales tax.
“Lawn care” includes
but is not limited to the following services: mowing, trimming, watering,
fertilizing, reseeding, resodding and killing of insects, moles, other
vermin, weeds, or fungi which may be threatening a lawn. Persons who
mow lawns are providing a taxable service regardless of their ages.
The services performed by
one who arranges and modifies the natural condition of a given parcel
or tract of land so as to render the land suitable for public or private
use or enjoyment is engaged in the business of “landscaping.” Landscaping
performed on or in connection with new construction, reconstruction,
alteration, expansion or remodeling of a building or structure is not
subject to tax.
When a landscape and lawn
care company installs underground irrigation or lighting systems, or
constructs other structures such as retaining walls, sidewalks or pools,
it is in a construction contract. When this occurs, the company
must pay tax on all construction materials and will collect no tax
from the customer. It is important in these situations for the
landscape or lawn care company to know the difference between landscape
materials and construction materials.
For complete information,
please read our brochure, "Iowa
Tax Rules: Landscaping and Lawn Care." (pdf)
seeds, plants, and fruit trees
the purchaser of vegetable seeds, plants or fruit trees will be consuming
the produce from the seeds, plants or trees, the sale is taxable in
Iowa. Sales of vegetable seeds, plants, and fruit trees are exempt
if the buyer will be selling the produce.
About Iowa Business Taxes
Are you a new
business? Or just need to know more? Our
tax classes are held all year statewide.