Get IA DoR 14-101a 2022-2024

Iowa Code section 423.3(51) provides an exemption for chemicals, solvents, sorbents, and reagents used in processing. Chemicals, solvents, sorbents, and reagents are exempt from tax if both of the following apply: The substance must be directly used and consumed, dissipated, or depleted during processing.

The tax rate for the pass-through entity tax is equal to the highest individual income tax rate under Iowa Code section 422.5A (8.53% for 2022 and 6% for 2023). The pass-through entity tax shall be due with the pass-through entity's tax return.

Some customers are exempt from paying sales tax under Iowa law. Examples include government agencies, some nonprofit organizations, and merchants purchasing goods for resale. Sellers are required to collect a valid exemption or resale certificate from buyers to validate each exempt transaction.

Persons below the annual income levels shown below are eligible to claim exemption from Iowa withholding: A married couple or a head of household with a total income of $13,500 or less. A single person with income of $9,000 or less.

Taxable Services Aircraft lease or rental, 60 days or less. Alteration and garment repair. Armored car services. Bank and financial institution service charges. Barber and beauty services. Battery, tire, and allied services. Boat repair. Camera repair.

Currently, Iowa taxes SaaS and a wide variety of digital products and services. Iowa does have an exemption for purchases made for business use, provided the purchase provides an exemption certificate to the seller.

Sales of services are exempt from Iowa sales tax unless taxed by state law. The retailer must add the tax to the price and collect the tax from the purchaser. The retailer cannot indicate that the sales tax is being “absorbed.”

Iowa retailers making sales online directly to customers are responsible for collecting and remitting tax for all taxable sales to Iowa customers and on taxable sales to customers in other states, if the retailer meets or exceeds the thresholds in those states.