Iowa

Iowa Sales Tax Holiday 2017

See below for the dates, items list, and other tax-free details for Iowa Sales Tax Holiday 2017.

The Iowa Sales Tax Holiday 2017 is on Friday, August 4th and Saturday, August 5th, 2017 for select clothing and footwear.

Note to Businesses: When completing your sales tax return, qualifying exempt sales are included on line 1, Gross Sales, and also on line 4, Exemptions.  Be certain to enter these exempt sales in the Sales Tax Holiday category for line 4. Iowa Sales Tax Holiday 2017

SourcesIowaSTHList_0 IowaSTHflier1

Businesses that are open on these days are required to participate. Businesses cannot advertise that they will pay or otherwise absorb the sales tax on items that don’t qualify. When completing the tax return, list qualifying Sales Tax Holiday sales on the “exemptions” line.

If you sell clothing or footwear in the State of Iowa, this law may impact your business.

  • Exemption period: from 12:01 a.m., August 4, 2017, through midnight, August 5, 2017.
  • No sales tax, including local option sales tax, will be collected on sales of an article of clothing or footwear having a selling price less than $100.00.
  • The exemption does not apply in any way to the price of an item selling for $100.00 or more
  • The exemption applies to each article priced under $100.00 regardless of how many items are sold on the same invoice to a customer

“Clothing” means…

  • any article of wearing apparel and typical footwear intended to be worn on or about the human body.

“Clothing” does not include…

  • watches, watchbands, jewelry, umbrellas, handkerchiefs, sporting equipment, skis, swim fins, roller blades, skates, and any special clothing or footwear designed primarily for athletic activity or protective use and not usually considered appropriate for everyday wear.

Sets Containing Both Exempt and Taxable Items

When exempt items are normally sold together with taxable merchandise as a set or single unit, the full price is subject to sales tax if the value of the taxable items exceeds the exempt ones.

Returning an Eligible Item

When a customer returns an eligible item purchased during the exemption period, the retailer should refund tax only if:

  • The customer produces a receipt or invoice showing tax was paid on the item, or
  • The retailer has sufficient documentation to show that tax was paid on the specific item.

Coupons, Rebates, and Discounts

Manufacturer’s Coupons

Manufacturer’s coupons do not reduce the sales price of an item. Therefore, a manufacturer’s coupon cannot be used to reduce the selling price of an item to less than $100.00 in order to qualify for the exemption.

 

Store Coupons and Discounts

Store coupons and discounts reduce the sales price of an item. Therefore, a store coupon or discount can be used to reduce the sales price of an item to less than $100.00 in order to qualify for the exemption.

 

Rebates

Rebates occur after the sale and do not affect the sales price of an item purchased.

 

Gift Certificates

The sale of a gift certificate is not taxable.

Eligible items sold and delivered during the exemption period using a gift certificate qualify for the exemption, regardless of when the gift certificate was purchased.

Eligible items sold and delivered after the exemption period using a gift certificate are taxable even if the gift certificate was purchased during the exemption period.

A gift certificate cannot be used to reduce the selling price of an item to under $100.

00 in order for the item to qualify for the exemption.

Rain Checks

Eligible items sold and delivered during the exemption period using a rain check qualify for the exemption, regardless of when the rain check was issued.

However, issuance of a rain check during the exemption period will not qualify an eligible item for the exemption if the item is actually sold and delivered after the exemption period.

Layaway Sales

A layaway sale is a transaction in which merchandise is set aside for future delivery to a customer who makes a deposit, agrees to pay the balance of the purchase price over a period of time, and at the end of the payment period, receives the merchandise.

Eligible items qualify for the exemption if the customer:

  • Takes delivery of the merchandise during the exemption period or
  • Puts the merchandise on layaway during the exemption period, even if final payment and delivery is not made until after the Sales Tax Holiday

Rentals

Rentals of eligible items do not qualify for the exemption.

Tags: , , , ,

Posted in 2017, Iowa, Sales Tax Holiday

%d bloggers like this: