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Iowa Department of Revenue: Don’t forget about consumer’s use tax

Dec 03, 2012

DES MOINES — As the holiday shopping season hits full-swing, the Iowa Department of Revenue would like to remind taxpayers that they may have an Iowa Consumer’s Use Tax liability on purchases made remotely from out-of-state, or “remote” sellers.

A 6 percent Consumer’s Use Tax is imposed on taxable goods and services for which the sales tax has not been collected. When the seller does not collect a sales tax, the purchaser becomes responsible for remitting the Consumer’s Use Tax. In most cases, this occurs on purchases from an out-of-state supplier not collecting Iowa tax, such as: online purchases; mail-order catalogs; television shopping programs; and toll-free 800 numbers.

The department has recently made it easier to pay Consumer’s Use Tax:

• eFile & Pay — you can now pay Consumer’s Use Tax electronically on the department’s website www.iowa.gov/tax, even if you don’t have a Consumer’s Use Tax Permit.

• Consumer’s Use Tax Worksheet — a fillable online worksheet at www.iowa.gov/tax/forms/32007.pdf to report Consumer’s Use Tax and mail or drop off with a check.

Iowa’s Use Tax was established in 1937, three years after the Sales Tax was enacted, to protect Iowa businesses from unfair competition by ensuring tax would be paid even if an out-of-state seller is not required to collect it from the purchaser. When tax is not collected on taxable purchases and services used in Iowa, the local businesses operate at a distinct competitive disadvantage.

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