Iowa Adds More Items to Exemption List

Attention manufacturers in Iowa! You could be paying more than you should. As of July 1st, the state of Iowa redefined what qualifies as exempt supplies in respect to the sales and use tax exemption for certain computers, machinery, equipment, and replacement parts. The list has now been expanded to include certain items used in tandem with exempt materials.

Some items that may qualify as exempt supplies when used with exempt computers, machinery, or equipment, include but are not limited to:

  • Saw blades
  • Drill bits
  • Filters
  • Jigs
  • Dies
  • Tools (not hand tools)
  • Cutting fluids
  • Oils
  • Coolants
  • Lubricants

These items, and those similar, are now titled “supplies”, and are no longer considered taxable under administrative rule.

Despite the new definitions for “supplies’ and “replacement part”, the general rules for qualifying exemption haven’t changed.

Some things don’t change; sales tax exemptions are complicated. But that doesn’t mean that they have to be hard.

Thousands of legislation adjustments are made each year across the United States, particularly on July 1st. In Iowa alone, tax adjustments appeared in relationship to tax holidays, churches/nonprofits, agriculture, planned tax breaks, and tax coupling to name a few.

The only way to truly stay updated is to constantly check legislation patterns and tirelessly investigate possible changes. This task is difficult in itself, but once you multiply it by each jurisdiction your company is involved in (through state, city, and districts), your workload starts to exponentially rise.

Worry not! Sales Tax DataLINK is following all of Iowa’s sales and use tax legislative adjustments including this one, and we constantly update so you don’t have to.

Don’t let legislation changes cost you money. Give us a call, and let us help.

Latest Articles

Sales Tax and Luxury Tax

Sales Tax and Luxury Tax

a Luxury taxes are special sales taxes charged only on luxury goods, non-essential items that usually are expensive. In New York, for example, there's a luxury tax on the purchase of houses costing over $1,000,000. From 1991 to 1993 there was a "yacht...

read more
Do You Need a Sales Tax Automation Consultant?

Do You Need a Sales Tax Automation Consultant?

a If you're looking into sales tax software options, don't forget to consider how you're going to get that software up and running. Just because you signed a contract and have the installation files in your possession doesn't mean you're ready to use...

read more
South Dakota and Grocery Sales Tax

South Dakota and Grocery Sales Tax

a South Dakota is one of three states in the Union that charges the same sales tax rates for groceries as for other goods. Proposals to reduce or eliminate sales tax on groceries have come up in nearly every legislative session, including this year's,...

read more