Iowa – Iowa Legislature’s 2020 Sales and Use Tax Changes

The Iowa Legislature passed a bill last week enacting several changes to Iowa tax laws. This bill makes changes made to Iowa’s Sales and Use Tax laws. These changes will be implemented when Governor Reynolds signs the bill. She has 30 days following the end of session to sign or veto the bill. Some of the modifications are listen below.

 Snowmobile and ATV: The Iowa Legislature added new sections regarding snowmobile owners and all-terrain vehicle owners to guide county recorders when the owners are unable to present satisfactory evidence of payment of sales or use tax. When an owner cannot prove that they paid sales or use tax, the county recorder is required to collect the tax owed and remit taxes collected to the Department of Revenue, as well as an itemized statement by the tenth day of each month. The statement must include the name of the taxpayer, make and purchase price of the snowmobile or all-terrain vehicle, amount of tax paid, and other information as required.

Software Sales Tax: The 6% sales tax is now imposed on services arising from or relating to software sold as tangible personal property in addition to specified digital products. The retail sale of specified digital products and a service is excluded as a bundled transaction when the service is essential and the true object of the transaction.

Deer Hunting: The sale of a commercial recreation service offering the opportunity to hunt a preserve whitetail deer is now exempted from the collection of sales tax if the sale occurred between July 1, 2005, and December 31, 2015.

Sales to Tribal Governments: The sales price of tangible personal property or specified digital products sold to and of services furnished to a tribal government is now exempted from sales tax.

Other changes include tax exemption for materials used on a tax-exempt construction projects, added sales tax on digital products, among others.

For more information:

Davis brown law firm
by kelsey shay
june 24, 2020