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Iowa: Certain Out-of-State Products Not Subject to Use Tax

  • Apr 10, 2013 | Gail Cole

 Some medical equipment is exempt from sales and use tax in Iowa.

Use tax has been getting a lot of attention in recent months, as revenue-seeking states try to capture revenue from untaxed out-of-state purchases. Increasingly, state departments of revenue are reminding residents that if they didn’t pay sales tax on purchases made in a different state or remotely (via Internet, catalog or phone), they probably owe use tax.

Bucking the trend, the Department of Revenue recently ruled that use tax is not owed on a control unit required to operate catheters. The reasoning is based on Iowa law, which reads, “Sales or rental of power devices especially designed to operate prosthetic, orthotic, or orthopedic devices shall be exempt from tax.” ((IAC701-231.8(4)).

Since the control unit is useless for any other purpose without the catheter, … [it] is exempt from use tax.”

How does your business keep track of what is and isn’t subject to use tax?

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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.