Policy letter; taxable/nontaxable services; Sep13,2001
Topic Code: T086Taxable/Nontaxable Services Document Reference: 01300117
September 13, 2001
order="0" alt="Redacted Content">Re: Taxable or:yellow'>and nontaxable services, your letter, received 08-31-01.Your recent letter to the Iowa Department of Revenue or:yellow'>and Finance has been given to me f or reply. Please allow me to introduce myself. My name is Darwin Clupper. I am a technical tax specialist with the Department's Policy Section. My particular area of concentration is Iowa sales or:yellow'>and use tax law.You engage in a business which provides a number of services. You use power washing equipment to clean hog confinement or:yellow'>buildings. You clean the walls, ceilings, or:yellow'>and flo ors of these or:yellow'>buildings as well as certain feeding equipment inside the or:yellow'>buildings. You also wash houses, tract or-trailers, or:yellow'>and farm machinery.Your letter asks if the perf ormance of any of these services is subject to Iowa sales tax. In response I would state that washing the hog confinement or:yellow'>buildings or:yellow'>and the tract or-trailers involves taxable services. The services of washing houses or:yellow'>and farm machinery are not taxable.By way of explanation f or this conclusion, I begin with the observation that only certain named or "enumerated" services are subject to Iowa sales tax. Those services are listed in ยง 422.43(11) of the Iowa Code. Among the taxable services listed are "vehicle wash or:yellow'>and wax" or:yellow'>and " or:yellow'>janit orial or:yellow'>and or:yellow'>building or:yellow'>maintenance or cleaning". Department rule 701 IAC 26.11 explains the tax on "vehicle wash or:yellow'>and wax". Department rule 701 IAC 26.60 explains the tax on " or:yellow'>janit orial or:yellow'>and or:yellow'>building or:yellow'>maintenance or cleaning". Department rules which explain the statutes the Department is obligated to enf orce have the f orce of law or:yellow'>and are presumed to be valid, Richards v. Iowa Department of Revenue, 360 N.W.2d 830 (Iowa 1985). Copies of these rules are included with this letter f or your study or:yellow'>and retention, if you wish.Note that rule 26.11 defines a "vehicle", the washing of which is taxable, to be "any vehicle which is commonly used on a highway". This definition includes tract or-trailers or:yellow'>and excludes farm machinery. So only the washing of the f ormer would be taxable. Concerning rule 26.60, washing the confinement or:yellow'>buildings is clearly the service of " or:yellow'>building or:yellow'>maintenance", but, as the rule explains, perf orming this service on a private home is not a taxable activity.In closing, I must issue my usual warning. The opinions which I have expressed in this letter are inf ormal only. Because of this, the Department could, in the future, take a position contrary to them.Sincerely,Darwin D. ClupperTax Specialist, Policy SectionCompliance Division515-281-3670Two enclosures