from the Director:
Pay the tax and relax.
Anyone who wants to settle
tax debts with the State of Iowa should take advantage of the Iowa
Tax Amnesty program being offered from September 4 through October
31, 2007. Eligible taxpayers include those who did not file a required
return, those who made mistakes on a previously-filed return, and those
who may simply have tax debt with the Department.
The program allows for a waiver
of all penalties and one-half the interest for past-due tax returns
or reports and any additional taxes due for returns or reports that
were originally due on or before December 31, 2006. The amnesty program
is available for all state taxes administered by the Department of
Revenue. The program does not apply to taxpayers currently under active
criminal investigation or to a taxpayer who is part of a criminal proceeding
pending in the Iowa court system.
The benefits of participating
in the taxpayer amnesty program include the following:
- participating taxpayers
can “wipe the slate clean” by clearing up unpaid, underreported or
overdue taxes without fear of retaliation;
- taxpayers can save money
because the program offers a one-time chance to pay without penalty
and one-half the interest waived;
- taxpayers will be able
to avoid legal action; and
- participating in the taxpayer
amnesty program will not increase the chance of being audited in
An application will be required
when requesting Tax Amnesty. All tax returns or reports must be filed
with the application. Write “Amnesty” across the top of the return
or amended return and on any check or money order.
The Department will launch
its Iowa Tax Amnesty Web site soon. The site will include frequently-asked
questions and their answers and access to the Tax Amnesty application
and other tax forms. In addition, a Tax Amnesty toll-free number and
e-mail address will be available.
Mark Schuling, Director
The "regular" local
option tax becomes effective in more than 40 new jurisdictions on July
1. In addition, Linn and Johnson counties approved the school local
and Saturday, August 3-4, 2007
Select Clothing and Footwear*
Hotels and motels in additional
jurisdictions will begin collecting the hotel / motel tax July 1.
Legislative summaries will
be available later this summer. They will be posted in the Research category
of the IDR Web site.
Each year, more than 3 billion payments
are made by direct payment worldwide. Also called direct debit and
electronic check, among others, direct payment is free.
the Iowa Department of Revenue direct payment option. As long as you're
filing your return through eFile & Pay, you might as well try ePay
and mail nothing!
for employees in interstate commerce
The department is aware of
possible confusion regarding employees of railroads or trucking firms
working in interstate commerce.
In compliance with federal
law, employees working in two or more states for railroads or trucking
firms in interstate commerce are subject to tax based on their state
Iowa tax should not be withheld
from nonresidents working in Iowa as employees of railroads or trucking
firms in interstate commerce if they are working in at least one other
state. The state of residence may require its tax to be withheld or
the employee to make estimated payments.
Iowa residents employed by
railroad or trucking firms in interstate commerce are subject to Iowa
withholding if they are working in two or more states.
Please tell your business
colleagues how to receive Iowa tax news instantly by e-mail.
If you were notified of this
newsletter by e-mail, you are already signed up. If you are reading
this on our Web site, you need to sign
up ! You will receive an e-mail from us asking you to confirm your
subscription. Be sure to reply!
you a new business? Or just need to know more? Our
tax classes are held all year statewide.
addition, we make house calls! Gather
your employees or your organization's membership. We will come to you
and address your Iowa business tax concerns. This service is free of
charge. Just e-mail us to contact
and Lawn Care
It is the time of year when
the department receives numerous inquiries related to sales tax on
the services of landscaping and lawn care. The information that follows
addresses some of the most frequently asked questions.
Landscaping – The service
of landscaping is subject to Iowa sales tax. Landscaping is defined
as arranging and modifying the natural condition of a given parcel
or tract of land to make the land suitable for public or private use
or enjoyment. Any services for which registration is required as a “landscape
architect” under Iowa Code section 544B.2 are not subject to tax if
performed by a registered landscape architect and separately billed.
The gross receipts from landscaping
services performed on or in connection with new construction, reconstruction,
alteration, expansion or remodeling of a building or structure are
not subject to tax.
Landscaping Materials – The
sale of sod, dirt, trees, shrubbery, bulbs, sand, rock, woodchips and
other similar landscaping materials, when used for landscaping and
sold to final consumers, is subject to sales tax. In this context, “final
consumer” ordinarily means the owner of the land to which the landscaping
materials are applied, or a general building contractor when the landscaping
contractor contracts with the general building contractor. When a landscaping
contractor uses materials to fulfill a contract, the landscape contractor
is considered the retailer of the landscaping materials and is obligated
to collect sales tax on the selling price from the final consumer.
When the retailer of landscaping
materials installs these items as a part of a contract for landscaping
or improving land for a lump sum, the entire gross receipts are subject
to tax. Any retailer's charges for “landscaping” are taxable. However,
a retailer's charges for nontaxable services are not taxable if contracted
for separately; or, if no written contract exists, the charges are
itemized separately on the invoice.
Construction Materials – Landscaping
materials should not be confused with construction materials. When
a landscaper provides both labor and materials to erect a structure,
he/she is considered to be a construction contractor for that portion
of the job. Structures include such items as retaining walls, lawn
lighting systems, lawn irrigation systems, pools, walks, and any other
permanently-attached item to realty or real estate. The landscaper
is considered the consumer of any construction materials used to build
a structure. In the role of a construction contractor, landscapers
must pay sales taxes and local option taxes, if any, on all construction
materials to their suppliers; however, they do not collect any tax
from their customer for materials or labor.
Lawn Care – Persons
in the business of lawn care are performing a service which is subject
to 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
Persons who perform lawn care
are providing a taxable service regardless of their ages; however,
effective 7/1/06 a casual sale exemption exists if (1) the owner of
the business is the only person performing the services; (2) the owner
of the business is a full-time student; and (3) total gross receipts
from the services do not exceed $5,000 for a calendar year.
More information is available
in the Landscaping and Lawn Care publication (pdf).
About eFile & Pay
About Iowa Taxes