Changes in Sales, Use, and Excise Taxes in Iowa

Key legislation was recently passed in Iowa, changing the filing and payment requirements for sales, use and excise taxes; the changes took effect on July 1.

The first change combines sales and use taxes into one permit and the filing as one return, meaning separate returns for consumer and retailer use taxes will no longer be used. If you currently have both a sales tax and use tax permit for your business location, the Iowa Department of Revenue will cancel unneeded permits for you.

The second change involves the filing frequency for sales, use and excise taxes:

• Taxpayers that collect less than $1,200 in sales and use tax per year will file returns and pay taxes annually.
• Taxpayers that collect more than $1,200 or more in sales and use tax per year will file returns and pay taxes monthly. Monthly filers are required to file and pay electronically.

The third change impacts the deposit payments requirement. Payments are now only due when a sales and use tax return is filed.

The above changes went into effect on July 1, 2022, and taxpayers will need to file the new sales and use return on or before August 31, 2022, for taxes collected in July. The Iowa Department of Revenue will automatically adjust taxpayer accounts and send out notices by mail regarding the new filing and payment requirements. Visit GovConnectIowa to file electronically or to learn more and get help.

If you have any questions related to Iowa’s new legislation, fill out the form on this page to connect with a tax specialist.

07/15/2022