[{"_1":2,"_100":-5,"_101":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,76,88],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},"mediaId",6543034,"mediaKeyId","3794836-52a7bfdf72f8c1667417f85f6b34c86e","parentId",3794836,"title","Iowa Department of Revenue explains how construction contracts, contractor classifications and materials are taxed","audioSeconds",1092,"startMs",415000,"endMs",1507000,"viewUrl","/Search/View?dp=1&key=3794836-52a7bfdf72f8c1667417f85f6b34c86e&start=415&end=1507","thumbnailUrl","https://assets.pipeline.soar.com/3794836-52a7bfdf72f8c1667417f85f6b34c86e/thumbnail_415000.jpg","articleUrl","/articles/6543034/Iowa/Iowa-Department-of-Revenue-explains-how-construction-contracts-contractor-classifications-and-materials-are-taxed","mediaUrl","https://secure.pipeline.soar.com/6543034-20bca3828b074206120feb78b89b01cd/orig.mp4?Expires=1771167868&Signature=NH4ifS9dtsnefEcI~ze2rtMZbWBI-ZD2fJr8yH6H2Oo0muJTI77igNHaThDEbUtkY9xsjTOr5hODOSXExTABvCtmHr45DfHEi3wRp3vgb0c989FJFlKsZk10W0MeslX6UkmrjsrHhkYhkwia6yjlZRSIS07jxwXX9WzAYo4HZlUUwIM7ouAwoygvthgxV38pzin4AYlPQHKnXEsf5Ge36P-XWWuXyXnOoajveFX6g3wLXlEoAWdc9Lc64US4g4McuENFwaeNTQBGMz7uiL5lG5P4LslcPwmpzl7IQnCe5hrs9i04PJ3NT9KPS5z~rfPjGT~YiSrIjsB45yCQV6U6TA__&Key-Pair-Id=KUT5TJCACFTXG","author","IASource Link","date","2025-06-11T18:59:05Z","article","The Iowa Department of Revenue presenters at an Iowa SourceLink webinar laid out how construction contracts, contractor classifications, and building materials are treated for Iowa sales and use tax purposes, with examples for electrical work, carpeting, manufacturers, and grain bins.

\"Construction contract is an agreement between a contractor and a supplier, wherein the contractor agrees to provide labor, materials, and supplies, and equipment to build a structure for the sponsor,\" Matt said, defining the term the department uses to identify exempt construction services. He and other presenters explained that services and labor connected with new construction, reconstruction, alteration or remodeling are generally not subject to sales tax when performed as part of a construction contract; instead, the contractor is treated as the consumer of materials and pays sales or use tax when purchasing those materials.

Why this matters: whether work is characterized as \"new construction\" or a taxable repair affects who pays sales tax (contractor as purchaser of materials versus the customer for taxable labor and materials) and can change bids and contract prices.

Key points and examples presented:
- Contractor classifications: the department described five classifications (owner, contractor, retailer with showroom, retailer, repair person) and said taxpayers should register under the classification that fits their business and notify the department if that classification changes. The classification affects whether a business purchases materials tax-exempt for resale and when it must collect sales tax from customers.
- Taxable vs. exempt services: enumerated taxable services (electrical/electronic repair and installation, plumbing and pipefitting, painting/papering/interior decorating, roof repair) are taxable when provided outside a construction contract but are exempt when performed on or connected with new construction, alteration, reconstruction, or remodeling.
- Repairs vs. new construction: magnitude, timing and physical relationship determine treatment. A minor roof repair (replacing a few squares of shingles after wind damage) is a taxable repair; replacing an entire roof is more likely to be treated as construction and generally not taxed as a service to the owner.
- Carpeting: the department said carpeting is treated as the sale of tangible personal property (TPP) rather than a building material; carpeting contractors typically purchase carpeting for resale and charge tax to the final consumer at installation unless the customer is tax-exempt.
- Manufacturer rules: when a manufacturer's goods are used in construction work, a fabricated-cost computation may apply; that fabricated cost includes materials, labor, and transport to/from the plant but excludes installation at the job site.
- Excise tax on certain heavy machinery and equipment: the presenters noted certain self-propelled building equipment (trackbacks, pile drivers, motorized scaffolding), auxiliary attachments, and replacement parts may be subject to a 5% state excise tax rather than the regular state and local sales/use tax rates.
- Grain bin exemption: the presenters said grain bins and materials used to construct or repair grain bins are exempt from sales tax and cited an effective date in their guidance (July 1, 2019) for that exemption.

The presenters cautioned that mixed contracts that include both construction work and sales of tangible personal property must be billed and documented correctly: contractors should purchase retail items tax-exempt for resale and charge sales tax on the tangible personal property sold to the customer while treating construction services according to construction rules.

The department repeatedly recommended contacting the department for binding determinations and referenced the contractors' guide and the Iowa administrative code listed on their slides for more detailed examples and rules.","mediaType","Video","parentTitle","Iowa Tax Webinar | Sales Tax Basics for Construction Contractors","oneSentenceSummary","The Iowa Department of Revenue told attendees at an Iowa SourceLink webinar that work performed \"on or connected with\" new construction, reconstruction, alteration or remodeling is generally not taxed as a service to the property owner; instead contractors pay tax on materials when purchased.","taxTitle","IASource Link, Executive, Iowa","taxId",27595,"location","Iowa","headline","","shortSummary",{"_33":77,"_35":36,"_37":38,"_39":78,"_41":79,"_43":80,"_45":81,"_47":82,"_49":83,"_51":84,"_53":85,"_55":56,"_57":58,"_59":86,"_61":62,"_63":64,"_65":87,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6543029,"Iowa clarifies that landscaping and lawn care are taxable, snow removal is not; invoicing and materials rules detailed",728,2573000,3301000,"/Search/View?dp=1&key=3794836-52a7bfdf72f8c1667417f85f6b34c86e&start=2573&end=3301","https://assets.pipeline.soar.com/3794836-52a7bfdf72f8c1667417f85f6b34c86e/thumbnail_2573000.jpg","/articles/6543029/Iowa/Iowa-clarifies-that-landscaping-and-lawn-care-are-taxable-snow-removal-is-not-invoicing-and-materials-rules-detailed","https://secure.pipeline.soar.com/6543029-9bc6c447e7ae14698bfddfbbf721ae71/orig.mp4?Expires=1771167868&Signature=Diy8GOFFP06mjpFulSUIm4rWhcu8Ry7ZIJMSaTCs0lM0djg3WQdMbgod0OVpMOZbSkXZ8yMhL~oiY8N3BCfZhF1hCFfPG~Jgu3z~W2eeGUkW99W3QitsoiY6NMmwbxsB8KgX9TG2m1H1B3-JEvU2Oks3LS8pC5EK5Mqa73qMjgz9DMf-Dr7q3~DQ0my6NUNVVtm1c3YUjBYzTUvqBcH8550l8rdVGKf~QJI91AAQkWMgT4~TBPlEXseEclh0Ec8Itd2FPPpf8b2MC2s4837V-IXqNoepYFpj7U7owN5h0RhHkZbp0U8a31U-vXWO6zOMqlSAwmv-QIHGXpeL80UaWA__&Key-Pair-Id=KUT5TJCACFTXG","The Iowa Department of Revenue clarified during an Iowa SourceLink webinar that landscaping, lawn care and tree-trimming services are taxable in Iowa while snow removal is not, and it explained how landscaping materials and mixed contracts should be billed to ensure correct tax treatment.

\"Landscaping, lawn care, tree trimming, and removal services are subject to Iowa sales and use tax under Iowa code section 4 23 2 6 a b,\" Nick Belke, policy director with the Iowa Department of Revenue, said during the presentation. He added that entities providing these services must hold a sales tax permit and remit sales tax to the department.

Why this matters: landscapers, mowing services, and tree contractors must collect and remit sales tax on the full sales price of taxable landscaping and lawn-care services to final consumers, and they must document billing appropriately when a job contains both construction-contracting items and landscaping services.

Key guidance from the webinar:
- Landscaping and lawn care: the department cited its administrative rule defining landscaping and listed typical lawn-care activities (mowing, trimming, watering, fertilizing, seeding, weed/fungus/insect control) as taxable. Lawn-care services are taxable regardless of the age of the person providing them and apply to residential and commercial properties, parks, cemeteries and golf courses.
- Landscaping materials: sod, dirt, trees, shrubbery, bulbs, sand, rocks, wood chips and similar materials used for landscaping and sold to final consumers are taxable. If a landscaper purchases materials for resale and properly claims the resale exemption, the landscaper must itemize the invoice to the customer to reflect the exemption.
- Construction-related items: when landscaping work includes erection of a structure (retaining walls, lawn lighting systems, irrigation systems, pools, walkways or other permanently attached items), that portion is generally treated as construction contracting and is not a taxable landscaping service—provided the invoice separately states the construction-contract charges from landscaping charges.
- Tree trimming and removal: trimming or removal of trees (including trunks, branches and stumps) and similar woody shrubs are taxable services; sale of wood cut during the work is treated as a sale of tangible personal property and is taxable.
- Snow removal: by contrast, snow-plowing, sanding or salting roads, sidewalks, and parking lots is not a taxable service in Iowa. However, materials used for snow removal (salt, sand, brine) and tools/equipment (plows, snowblowers) are taxable as tangible personal property; the service provider is the consumer of those items and must account for sales or use tax on them.

The department illustrated these rules with billing examples and recommended landscapers and contractors consult the department's sales/use guidance and the administrative rules cited on slides for detail. Presenters also said their contractors guide and website guidance are being updated and encouraged practitioners to contact the Department of Revenue for specific, binding determinations.","The Iowa Department of Revenue told a webinar audience that landscaping, lawn care and tree-trimming services are taxable in Iowa while snow removal is not; materials and equipment remain taxable even when the service is exempt.",{"_33":89,"_35":36,"_37":38,"_39":90,"_41":91,"_43":92,"_45":93,"_47":94,"_49":95,"_51":96,"_53":97,"_55":56,"_57":58,"_59":98,"_61":62,"_63":64,"_65":99,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6543040,"Iowa businesses told to register for sales and use tax, warned of new electronic-filing penalty",100,283000,383000,"/Search/View?dp=1&key=3794836-52a7bfdf72f8c1667417f85f6b34c86e&start=283&end=383","https://assets.pipeline.soar.com/3794836-52a7bfdf72f8c1667417f85f6b34c86e/thumbnail_283000.jpg","/articles/6543040/Iowa/Iowa-businesses-told-to-register-for-sales-and-use-tax-warned-of-new-electronic-filing-penalty","https://secure.pipeline.soar.com/6543040-06cbaa51e9768583b3b4f16b3b3ca2b9/orig.mp4?Expires=1771167868&Signature=WnJa4impAWudbdJwdjeptzx6f0XXIjhdG6DNlRgnXVC1V0cBzeRF25n4eKuUBVO-H3u2GjxLhraSzemuGf0VGzWorLsz-WUZLz2vuIh86ArkJ6q2L1nA0OAm5SlKcidh~cbP17rXOBbYrzWSLpX5Tti8mNPLz9pM~uNw9VWpFzgHyAohJszFmd8n9m6uMOhhkKoBXw26-BWS2gqbkBgSXhXu2Zm5328TxTDlj~rwjwp60LVAN4csbeeqnx43muMVmYP8AlZEPISxvrbK9I1QeoeZ4H~zo~ERrOyVxyHZ4y~oh2OH6uOoCB6X7M7tv6IXE8LjnQq7kOPjTVa1DZV0ew__&Key-Pair-Id=KUT5TJCACFTXG","Presenters from the Iowa Department of Revenue told contractors and business owners at an Iowa SourceLink webinar that any business with nexus in Iowa must register for a sales and use tax permit and remit tax according to the department's rules. Matt, a Department of Revenue presenter, said the department's web portal, GovConnectIowa (govconnect.iowa.gov), is the portal for permit registration and filing.

The department described who has nexus and how often to file. \"Anybody with some sort of nexus in Iowa must register for a permit,\" Matt said, noting that nexus includes a business located in Iowa, sending employees into Iowa to work or deliver goods, or making $100,000 in annual sales into Iowa. He added that businesses with at least $1,200 in sales tax in a year must file monthly; businesses with under $1,200 in sales may file annually, and there is a seasonal filing option for businesses that have at least $1,200 in sales during only four months of the year.

The guidance included the department's expectations for timely filings and a new requirement for electronic filing. \"Starting July, there's gonna be a new penalty associated with that. We cannot accept returns they're filed by paper beginning in July,\" Matt said, warning that paper returns may not be processed and could prompt the department to issue estimated assessments that require follow-up to correct.

Why this matters: contractors, retailers and service providers who do work in Iowa must be registered and collect or remit sales tax as required; failing to file or filing incorrectly can trigger estimated billing and administrative follow-up.

The department emphasized that monthly filers must submit a return each month, even if zero, and that exceptions to the electronic-filing requirement are available but require contacting the department. Contact details and the sales/use filing portal information were provided in the webinar materials and chat.

Details and examples provided in the webinar:
- Nexus examples: physical presence in Iowa; employees performing work or deliveries in Iowa; $100,000 in annual sales into Iowa.
- Filing frequency: monthly if at least $1,200 in annual sales tax liability; annual filing available for smaller accounts; seasonal filing option exists for businesses concentrated in a limited season.
- Due dates: monthly returns are due on the last day of the month following the reporting month (example given: June sales due by July). Zero returns are required when applicable.
- Electronic filing: the department said returns must be filed electronically through GovConnectIowa beginning in July; paper returns may not be processed and could lead to estimated billings.

The presenters encouraged businesses with specific, individualized questions to contact the department directly for binding guidance and to use the GovConnectIowa portal for registration and filings.","Presenters from the Iowa Department of Revenue told attendees at an Iowa SourceLink webinar that businesses with nexus in Iowa must register for sales and use tax, described filing frequencies and a seasonal option, and warned that starting in July returns must be filed electronically through GovConnectIowa or risk estimated billings.","actionData","errors"]

Article not found

Iowa Department of Revenue explains how construction contracts, contractor classifications and materials are taxed

Iowa clarifies that landscaping and lawn care are taxable, snow removal is not; invoicing and materials rules detailed

Iowa businesses told to register for sales and use tax, warned of new electronic-filing penalty