Iowa Tax

graphic for Iowa Department of Revenue Tax eNews electronic newsletter
September 2002
Electronic Newsletter of the
Iowa Department of Revenue & Finance

Bair Goes Into Hibernation

Director G.D. Bair has announced that November 27 will be his final day with the department. "Bair," as he is affectionately known, has served his entire career of 37 years with the State of Iowa and the Department of Revenue, 27 years as director. During his tenure, he has seen many changes, from typewriters and punch cards to computers and mainframes and now the Internet and World Wide Web.

Bair is currently the longest-serving director of a state tax department. He is active with the MSATA, NTA, FTA, NASACT and NASC national organizations. Locally, he is a member and past president of the Ankeny Iowa Rotary, a member of ASPA and IAAO and serves on other state and local boards and committees.

Bair says, "I have been fortunate to work my entire professional career for one employer, the taxpayers of Iowa. I now look forward to spending time with my family and 'grand-Bairs.' Beyond that, who knows."

Thank you, Bair, for your guidance and friendship over the years.

IDRF Announces Effort to Reduce Paperwork for Small Businesses

Beginning in early October, more than 28,000 letters are being mailed to Iowa withholding agents informing them their filing frequencies are changing January 1, 2003. Letters will not be sent to those whose filing frequencies will not change. This represents 45 percent of all Iowa withholding agents. Of those changing, about 90 percent will file less frequently.

In addition, beginning in November, similar letters will be sent to more than 30,000 sales tax permit holders whose filing frequencies will change January 1. Again, letters will not be sent to those whose filing frequencies will not change.

Why is this being done?
For two reasons:

  • New legislation allows our department to adjust the dollar amount levels that determine how often returns and deposits should be filed. These levels had not changed for many years. We adjusted them based on inflation, tax rate changes, and other factors.
  • We estimate this effort will reduce paper documents that must be filed and processed by 30 percent. This means that taxpayers will file approximately 500,000 fewer deposits and returns each year.

What taxes are affected?

  • Iowa sales tax and Iowa withholding tax
  • Not affected at this time: Iowa retailers use tax and Iowa consumers use tax

How did the department determine who would change and who would not?
We reviewed the amount of tax you remitted in 2001. Based on those numbers, we assigned the appropriate filing frequency according to the new dollar amount levels.

What are the new filing frequency levels?
Click here to see the levels for both sales and withholding taxes. The chart also gives a general idea of when and what type of forms to file.

What if you don't want to change your filing frequency?

  • If we determined that you need to file more often, you are required by law to do so.
  • If it was found you need to file less often, you may request to remain in your current filing status and continue to file more frequently than you need to by law. See "Contact us" below. However, if you want to continue to file more often than you need to, you must make payments by electronic funds transfer (EFT). This enables our department to process less paper and reduce costs.

Do you believe we changed your frequency incorrectly?

If the amount(s) paid in 2001 are not consistent with the amount of tax you normally remit, and you would like us to review your filing history to determine if the change we made was appropriate, contact Customer Accounts as explained below.

Contact us...

All requests must be made in writing and sent by mail, fax, e-mail or through our online change application.

Do you need further information about filing frequency changes?

Where's My Refund?

We recently added a new feature to our Web site:"Where's My Refund?" You can now check the status of your refund via this new service. All you need is to have your Social Security Number and the amount of the refund requested.

An automated phone service is also available. Call our Refund Status line at 1.800.572.3944 (Iowa only) or 515.281.4966 and have your SSN and refund amount ready.

Also, a reminder that if you sent in a paper return, you must allow at least 12 weeks for processing, and if there was an error on the return, it will take even longer.

E-File Your Iowa Income Tax Return!

For us, income tax season is right around the corner. While others are thinking of sugar plum fairies and candy canes, we are thinking IA 1040's and W-2's. Soon, millions of returns will be coming into our office.

Don't wait 12 weeks or more for your Iowa income tax refund. E-File and receive your refund in 2 weeks or less. E-File is available for zero balance due, refund or balance due returns. E-File options available:

1) Federal/State electronic filing through a tax professional
2) Federal/State electronic filing through purchased software
3) Federal/State electronic filing online
4) WebFile [Editor's Note: WebFile is no longer an e-file option.]
5) TeleFile [Editor's Note: TeleFile is no longer an e-file option, beginning with tax year 2007.]
6) State only filing

TeleFile and WebFile require you to use the same filing status as on the Iowa income tax return the prior year. These E-File options are not for the first-time filer and do require that you timely filed with us the year before. The WebFile application does allow for change of address.

New for WebFile this year is the alternate PIN# option. If you timely filed with us last year, but didn't receive a PIN# in the mail or can't locate it, you can access the PIN# we assigned to you directly through the WebFile application. You will be required to enter last year's filing status and the amount of refund/balance due claimed on your Iowa income tax return. Once this shared information is correctly provided, your PIN# will be shown on the screen.

WebFile has been expanded considerably this year. This free Internet filing option will be available for the following:

  • single
  • married filing joint
  • married filing separate on a combined return
  • head of household with qualifying person
  • individuals over age 65 and/or blind

Income allowed:

  • wages
  • interest
  • dividend
  • pension/annuities
  • unemployment
  • Social Security

Deductions/credits allowed:

  • health insurance deduction
  • pension exclusion
  • Federal and state estimate payments
  • limited itemized deductions
  • tuition/textbook credit
  • child/dependent care credit

State only filing is new for tax year 2002. Some software companies may allow you to electronically file just your Iowa income tax return. The direct deposit refund option saves you time waiting on a paper check and helps us by not printing and mailing a paper refund check.

Questions on E-Filing? Please contact the Iowa Department of Revenue and Finance, Taxpayer Services, by e-mail, visit the IDR Web site or call: 515-281-3114.

Fall 4-Wheelin' Fun!

The sale of ATV's to most consumers is taxable. It is fraudulent for a company selling ATV's to tell customers to sign an exemption certificate to avoid tax when the buyer is not eligible for exemption. Penalties and/or criminal charges could result for both the retailer and customer. For more information on taxable sales visit our Tax Research Library.

Grain Bins and Tanks

Fall harvest is in full gear! Grain bins that are permanently installed are subject to sales tax. The buyer of the building materials is responsible for paying sales tax or use tax on those materials. The buyer is the person who pays the vendor. Questions? E-mail us.

Sales Tax Holiday Held August 2-3
If you have questions on how to fill out your return to report non-taxable sales or if you were incorrectly charged sales tax, visit our Sales Tax Holiday Web page for information. Also, we typically will not have an idea of "total savings" to Iowans until at least sometime next spring, after all the annual filers have sent in returns and we have time to compile the reports.

New Iowa Local Option Tax Jurisdictions July 1...

See our last issue for more info. The most comprehensive file we have on regular and school local option taxes is an Excel file.

REMINDER: Sales Tax Return Mailings

We are still receiving calls on this issue. This year the department changed its mailing process. Instead of mailing quarterly and monthly deposits four times each year, we are mailing them only twice each year, two quarters of returns and deposits in one envelope.

These forms are preprinted with your permit information. Please be sure to use the correct preprinted form. For more information, check out our March 2002 Iowa Tax
or e-mail us.

Fall tax classes are being held NOW!

Tax Professionals: Our classes qualify for continuing education credits.

Anyone can subscribe to Iowa eLists !!

Help us spread the word! Five lists, customized for different groups of our customers are available. Subscribers will receive relevant, current news and updates on Iowa taxes - no SPAM! This service is absolutely free of charge. [Editor's Note: Additional tax categories are available.]

  1. Individual Income Tax for tax professionals and others

  2. General Business Tax Sales, Use and Local Option tax information for businesses and others
    Iowa Tax e-News public newsletter

  3. Withholding Tax for employers and others

  4. Motor Vehicle Fuel Tax, especially for permit holders

  5. Cigarette and Tobacco Tax, especially for permit holders

  6. Contractors Coming Soon! [Editor's Note: This category is now available.]

  7. Government Entities Coming Soon! [Editor's Note: This category is now available.]