Iowa officials outline sales tax requirements for contractors and landscaping services

The Iowa Tax Webinar on Sales Tax Basics for Construction Contractors, hosted by IASource Link on June 11, 2025, focused on essential tax regulations affecting contractors in the state. The meeting aimed to clarify various aspects of sales and use tax, particularly for those in the construction industry.

The session began with an overview of who requires a sales and use tax permit. It was emphasized that any business with a physical presence in Iowa, or those making significant sales into the state—specifically, $100,000 annually—must register for a permit. Participants were directed to the GovConnect Iowa portal for registration and tax filing, which serves as a comprehensive resource for tax-related needs.

Key points discussed included the filing frequency for sales tax returns. Businesses with at least $1,200 in sales tax annually must file monthly, while those with lower sales can opt for annual filing. Seasonal businesses, such as lawn care companies, were informed about a seasonal filing option available for those meeting specific sales criteria.

A significant update highlighted during the meeting was the introduction of an electronic filing penalty. Starting in July, all tax returns must be filed electronically through GovConnect Iowa, as paper returns will no longer be accepted. This change aims to streamline the filing process, but participants were warned that failure to comply could result in estimated billing from the tax department.

The webinar also covered critical distinctions relevant to the construction industry, including the differentiation between taxable and exempt purchases of materials, supplies, and equipment. Participants learned to identify designated exempt entities and the tax implications for landscaping and lawn care services.

Overall, the meeting provided valuable insights into navigating sales tax regulations for contractors in Iowa, emphasizing the importance of compliance and the resources available to assist in the process. Attendees were encouraged to familiarize themselves with the new electronic filing requirements and to utilize the GovConnect Iowa portal for their tax needs.