Commercial Enterprises in Iowa are Exempt from Paying Sales Tax on Computers

Did you know that “commercial enterprises” in Iowa are exempt from paying sales tax on computers and all devices fastened to it?  We’ve had this tid-bit come up with a few clients recently and thought it might be good information to share with all of our Iowa clients. 

Who is eligible?

Commercial Enterprises include businesses and manufacturers conducting business for profit but excludes professions, occupations, and nonprofit organizations.

More definitions:

• “Profession” means a vocation or employment requiring specialized knowledge and often long and intensive academic preparation. Lawyers and doctors are examples of professions. Professions, including professional corporations, do not qualify for the exemption.
• “Occupation” means an individual who has a particular skill or trade. Farming is considered to be an occupation; therefore, farmers do not qualify for the exemption.

What is eligible?

• “Computer” means stored program processing equipment and all devices fastened to it by means of signal cables or any communication medium that serves the function of a signal cable. A computer is a device having information processing capabilities and includes word processing equipment, testing equipment, and programmed or programmable microprocessors and any other integrated circuit embedded in the machinery or equipment.
• “Devices” means the physical computer assembly and peripherals fastened by a signal cable or other communication medium including, but not limited to, such items as the central processing unit, keyboards, consoles, monitors, display units, memory, disk and tape drives, terminals, printer, plotters, modems, tape readers, card readers, card or tape punchers, document sorters, optical readers, and digitizers.
• For further definitions, please click here.

If you are an organization that qualifies and have purchased technology equipment, it may be worth your time to do some further investigating to see if you qualify.  Feel free to get in touch with one of our team members with further questions.