Iowa – Newly Enacted and Amended Sales and Use Tax Exemptions

SALT Report 2437 – New legislation in Iowa creates a new sales and use tax exemption and amends an existing exemption.

New Exemption

The sales price from the sale of chemicals, solvents, sorbents, reagents, or other tangible personal property used to provide a vehicle repair service is exempt if the chemicals, solvents, sorbents, reagents, or other tangible personal property:

  • Is directly and primarily used in providing the vehicle repair service,
  • Is consumed or dissipated in providing the vehicle repair service, and
  • Will come into physical contact with the vehicle upon which the vehicle repair service is performed

However, the exemption does not apply to tangible personal property that can be used to provide multiple vehicle repair services, such as machinery, tools and equipment.

Amended Exemption

The sales tax exemption for items purchased with government subsidy coupons now includes purchases made with food stamps, electronic benefits transfer cards, or other payment methods authorized by the U.S. Department of Agriculture, the federal Food Stamp Act of 1977, or the federal supplemental nutritional assistance program.

The provisions in this Bill are effective July 1, 2013.

For Further Information

Iowa State Legislature – House File 575, Laws 2013