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Iowa Clarifies Certain Sales and Use Tax Refunds

  • Nov 5, 2012 | Gail Cole

The state of Iowa allows eligible businesses to claim a sales and use tax refund under the High Quality Jobs Program, Enterprise Zone (EZ) program, or Housing Enterprise Zone Program. A recently released Notice of Intended Action clarifies Iowa Administrative Code 15.331A by adding a new rule to the Iowa Administrative Code. 

ARC 701--12.19(15) will "provide clarification on how eligible businesses can claim this sales and use tax refund." The new rule, scheduled to take effect on December 5, 2012, reads:

"12.19(1)Sales and use tax eligible for refund... :

a. Sales and use tax paid for gas, electricity, water, or sewer utility services, goods, wares, or merchandise, or on services rendered, furnished, or performed to or for a contractor or subcontractor and used in the fulfillment of a written contract relating to the construction or equipping of a facility of the eligible business.

b. If the eligible business is involved in a warehouse or a distribution center, sales and use tax attributable to racks, shelving and conveyor equipment."

12.19(2) Sales and use tax ineligible for refund...:

a. Any local option sales tax paid is not eligible for the refund. The refund is limited to the state sales and use tax paid.

b. Any sales and use tax attributable to intangible property and furniture and fixtures is not eligible for the refund."

12.19(3) Claiming the refund.

  • "Eligible businesses must file a claim for refund within one year of project completion." "Project completion" means "the first date upon which the average annualized production of finished project for the preceding 90-day period at the manufacturing facility is at least 50 percent of the initial design of the facility" for a manufacturing facility. Phew. Say that three times in a row.
  • "For all other facilities, project completion is the date of completion of all improvements necessary for the start-up, location, expansion or modernization of the business."

The Notice of Intended Action outlines forms required to request a refund of the sales and use taxes.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.