Greater Dallas County
Development Alliance
March 26, 2014
Greg Stokke
Taxpayer Services Section
Sales Tax
Use Tax
Just what is
the Difference?
2
Sales Tax
• Sale is made from an Iowa location
and
• Delivery of product occurs in Iowa
or
• Service is performed in Iowa
3
Sales Tax
COLLECTED by the RETAILER
PAID by the FINAL CONSUMER
REMITTED to the State by RETAILER
4
Use Tax Requires
Out of State Vendor
Iowa Purchaser
5
Use Tax
May be Collected by the Retailer
or
Paid to the State by the Purchaser
6
QUIZ QUESTION #1:
SALES TAX OR USE TAX?
• A resident of Omaha, Nebraska visits a
store in Council Bluffs, Iowa.
• This individual purchases an item at the
Council Bluffs store, takes it to his car,
and returns to Omaha.
Sales Tax
7
What is Taxable?
All tangible
personal property
unless
a specific exemption has
been written into Iowa Law.
8
Taxation is the Rule
for
Tangible Personal Property
9
Exemption is the Rule
for
Services
Unless listed in Iowa law.
10
What’s the Tax Rate?
• 6% State
Sales/Use Tax
• 1% Local
Option Sales
Tax (LOST)
11
Local Option
Sales Tax
What does it
mean to me?
18
What is Local Option Sales Tax
(LOST)?
An additional 1% sales tax
that can be imposed
by Iowa counties and cities.
13
Is LOST Calculated “On Top” of
the State Sales Tax?
NO.
It is imposed in addition to,
but not on top of, the
6% state sales tax.
14
Do I Need a Special Permit
to Collect LOST?
No.
Your State of Iowa
sales/retailer’s use
tax permit is the
only permit required.
15
How Do I Know if a Jurisdiction
Has LOST?
See our Web site for LOST jurisdictions
www.iowa.gov/tax
16
LOST List and LOOK UP App
Look up by zip code or address.
17
QUIZ QUESTION #2:
TRUE OR FALSE?
• An Iowa retailer needs a
local option tax permit
from each jurisdiction that
imposes LOST.
False
18
On What Types of Sales
Does LOST Apply?
LOST generally applies to the same sales
that are subject to state sales tax.
19
On What Types of Sales
Doesn’t LOST Apply?
Exceptions:
•
•
•
•
•
•
Room rentals, in a hotel, motel, or other similar facility
Vehicles subject to registration
Sales of equipment by the State Department of Transportation
Sales of natural gas or electric energy subject to a city- or county-imposed
franchise fee or users fee
The sale of direct-to-home satellite pay television service
Self-propelled building equipment, pile drivers, motorized scaffolding, or
attachments customarily drawn or attached to them, including auxiliary
attachments which improve their performance, safety, operation, or
efficiency and including replacement parts used by contractors,
subcontractors and builders for new construction, reconstruction, alterations,
expansion or remodeling of real property or structures
20
When Do I Need to Collect LOST
on Sales of Tangible Goods?
LOST applies when taxable goods
are delivered in a jurisdiction
imposing the tax.
21
When Do I Need to Collect LOST
on Sales of Taxable Services?
LOST applies when
the first use of taxable
services occurs, or potentially
could occur, in a jurisdiction
imposing the tax.
22
What’s an Example of the First Use
of a Taxable Service?
• A person hires a limousine to drive them
and several friends to a concert at WellsFargo Arena in Des Moines.
• The limo picks them up in Perry, drives to
Des Moines, and returns them to Perry
after the concert.
• The first use occurred in Perry and the
sale is subject to LOST.
23
QUIZ QUESTION #3:
IS LOST DUE?
• Des Moines does not have LOST.
• Adel does have LOST.
• An Adel resident buys a refrigerator
at a Des Moines store and asks the
store to deliver it to her home.
LOST is due.
24
Can LOST be Imposed When
State Sales Tax Isn’t?
• No.
• There is one exception:
LOST can be imposed on
residential energy where
the state sales tax has
been phased out, but
where LOST still applies.
Sales Tax
25
What About Utilities?
The following are subject to LOST
if the billing address of the subscriber
is located in a LOST jurisdiction:
Gas
Electricity Heat
Water
Communication Pay-Television
26
Does the Billing Date
Matter on Utilities?
YES.
LOST is imposed based on the billing
date, not the period in which the utility
service was provided.
27
Does LOST Apply to Use Tax?
No.
LOST is a sales tax.
There is no local option use tax.
28
Does That Mean Anything
Bought from an Out-of-State
Retailer is Exempt from LOST?
No.
An out-of-state retailer who delivers
directly into a LOST jurisdiction must
charge the LOST.
29
QUIZ QUESTION #4:
IS LOST DUE?
• LOST in a particular city began on
1-1-2014.
• Water bills for usage during the
month of December 2013 were sent
to city residents with a billing date
of 1-2-14.
LOST is due.
30
How Often and When Do I File?
• Filing frequency is
based on how much tax
you expect to collect.
• This amount is
indicated on your
application when you
register for your permit.
31
Iowa Sales Tax
filing frequency requirements
Semi monthly
$5,000 per month
Monthly
Under $5,000 per month
Quarterly
Under
$500 per month
Annually
Under
$120 per year
32
How Do I Report and Pay LOST?
• LOST is reported and paid to the State of Iowa
along with the state sales tax.
• Retailers make no payment directly to a locality.
• Retailers show a breakdown of local option
taxable sales and tax by county on quarterly and
annual returns.
33
How Do I File?
Tax returns are filed electronically through the
Department’s online service eFile & Pay
www.iowa.gov/tax
34
You will always need:
BEN, User ID, Password
35
www.iowa.gov/tax
36
www.iowa.gov/tax
37
38
For Breaking News
eLists
•
•
•
•
•
•
•
•
•
General Business (sales/use)
Individual Income (tax professionals)
Withholding
Motor Vehicle Fuel
Cigarette/Tobacco
Construction Contractors
Government Entities
Economic, Fiscal & Statistical Research
Iowa Tax Research Library Updates
39
Follow Us on Twitter
@IDRBusinessTax
@IDRIncomeTax
@IDRTaxPros
40
Like Us on Facebook
www.facebook.com/iowadepartmentofrevenue
41
Need More Information?
• More details can be found on our Web site:
Iowa Local Option Tax Information
• Call us: 8 a.m. - 4:15 p.m. CT
515-281-3114 / 800-367-3388
• E-mail us at [email protected]
42
Protect Yourself from
Identity Theft
• IDR will always identify itself.
• We will NEVER ask you to provide your full Social
Security Number by e-mail or regular mail.
• We do not send e-mails asking for personal or
financial information. This includes any type of
electronic communication, such as text messages
and social media channels.
Protect Yourself from
Identity Theft
If you are unsure the communication you
received is official:
• Do not provide any personal or confidential
information.
• Contact us. We will confirm whether the
communication you received was from the Iowa
Department of Revenue.
Purpose of this Presentation
This presentation is intended for
general educational purposes only.
Anyone involved in an audit or protest
must contact the Department
representative they are working with
on that issue.
Questions?
46
Greater Dallas County Development Alliance
March 26, 2014
Adventures with LOST
(Local Option Sales Tax)
(Statistical Reports – State wide)
Department of Revenue,
Property Tax Division – Local Government Services
Joel Gabrielson
Local Government Services
Distribution of Local Option Tax funds
to Local Governing Jurisdictions
Iowa Department of Revenue, Property Tax Division,
Local Government Services
Joel Gabrielson -- [email protected]
–Local Option Sales and Services Tax
(LOST)
Local Option Tax Information
–Sales Tax TIFs – Local option estimated
effects
–Franchise Fee – Local option estimated
affects
–Hotel-Motel Tax
Iowa Department of Revenue
50
•
Distribution Timeline for LOST/SAVE Estimates
August - Tax Research develops an estimate of LOST and SAVE
distributions by County.
•
August 15 – Local Government Services notifies cities, counties, and school
districts of the planned 95% monthly distributions.
•
August 31 - The Department issues the first monthly estimate payments,
which are released before the last day of each month.
•
April - Tax Research reviews receipts, and adjusts total estimates for the
Fiscal Year. Local Government Services applies distribution adjustments as
needed in May, June and July, assuring 95% funding of estimated
payments issued by July 31.
•
July 31 - The Department issues the last scheduled estimate payment for
the fiscal year.
•
October 15 - Compliance Services reviews and clears filed returns,
including June quarter sales tax returns from the processing system.
•
November 10 - Reconcile actual revenue to estimated distributions. Funds
are issued to counties that have been underpaid. Funds are recouped from
counties that have been overpaid.
Local Option Tax Calculation for
Estimated Payments
• LOST Distribution Formula
– Jurisdiction Share (%) is based on
• (0.25 x Property Valuation) + (0.75 x Population)
• (Property valuation from July 1, 1982 through June 30, 1985)
– Monthly Distribution Estimate X 95%
X Prorated Jurisdiction Share (%)
= Monthly Payment
Calculation of Estimated Payments for
Local Option Tax
• Each year an estimate is calculated by Tax Research for
the Local Option Sales Tax to be distributed to each
county.
• The estimated amount is disbursed in monthly payments
for each jurisdiction.
• The Code specifies that 95% of the total estimated
payment must be sent to each jurisdiction during the
fiscal year.
• Funds are held during accruals to reconcile the
remaining 5% which is paid by Nov. 10 of the following
fiscal year.
FY14 Estimated Distributions
DALLAS COUNTY
Annual FY14 Esti
25-01Perry
858,063.00 63.76%
25-02Adel
377,985.00 28.09%
25-03Dallas Center
0.00
0.00%
25-04Dexter
0.00
0.00%
25-05Redfield
83,410.00
6.20%
25-06Waukee
0.00
0.00%
25-07Woodward
0.00
0.00%
25-08Bouton
12,367.00
0.92%
25-09 Dawson
13,883.00
1.03%
25-10De Soto
0.00
0.00%
25-11Granger
0.00
0.00%
25-12Linden
0.00
0.00%
25-13Minburn
0.00
0.00%
25-14Van Meter
0.00
0.00%
25-15Clive
0.00
0.00%
25-16Grimes
0.00
0.00%
25-17Urbandale
0.00
0.00%
25-18West Des Moines
0.00
0.00%
25-22Unincorporated
0.00
0.00%
25-24TOTAL
POLK COUNTY
77-10 POLK CITY
Annual
FY14 Esti
Dist %
2,414,272.00
95.66%
77-15
77-24
109,537.00
2,523,809,00
Dist %
1,345,708.00 100.00%
SHELDAHL (MULTIPLE CO 08 85)
TOTAL
WARRREN COUNTY
91-01
Indianola
91-02
Carlisle
91-03
Norwalk
91-04
Milo
91-05
Ackworth
91-06
Bevington
91-07
Cuming
91-08
Hartford
91-09
Lacona
91-10
Martensdale
91-11
New Virginia
91-12
Sandyville
91-13
Spring Hill
91-14
Staint Marys
91-22
Unincorporated
91-24
TOTAL
4.34%
100.00%
Annual
D
FY14 Esti
ist %
0.00
0.00%
0.00
0.00%
0.00
0.00%
0.00
0.00%
0.00
0.00%
120,131.00
100.00%
0.00
0.00%
0.00
0.00%
0.00
0.00%
0.00
0.00%
0.00
0.00%
0.00
0.00%
0.00
0.00%
0.00
0.00%
0.00
0.00%
120,131.00
100.00%
IOWA LOCAL OPTION SALES TAX TIF
– A city may, by ordinance of the city council,
create a tax increment financing (TIF) district
for the purpose of funding projects located
within the city’s urban renewal area.
– If located within a county that imposes a
Local Option sales and services tax
(LOST)
– If it has an Urban Renewal Area.
IOWA LOCAL OPTION SALES TAX TIF
• The city creates a LOST TIF District by ordinance,
after county board of supervisors, which will have
funds diverted to the TIF, approve:
– The city’s plan for collection
– The use of county LOST revenues to fund the
city’s urban renewal projects
•
Local Option Distributions for the county are
reduced by the increment of growth, which is
based on Sales Tax TIF area permit holders.
IOWA LOCAL OPTION SALES TAX TIF
• The Department of Revenue assists the city after
an ordinance has passed, by establishing:
– “Base year” sales made in the urban renewal area.
– “Increment” which is the growth determined by
comparing the base year with following year(s). The
increase in LOST revenues from sales in the urban
renewal area in subsequent years goes directly to a
special city fund to be used on the city’s urban renewal
projects.
• In the absence of the LOST TIF, all LOST
revenues are returned to the county where they
are distributed according to the existing population
and property tax levy-based formula.
Franchise Fees Increment Effects
• The following slide reflects procedures used to apply the
Franchise Fees increment effects to active jurisdictions
within your county.
• Local Option distributions for active participants in the
county are reduced by the removal of the Utility Sales
Tax collections from permit holders, that submit utility
sales tax within a franchise fee area.
If a Utility Franchise Fee is implemented
effects on LOST distributions follow:
•
•
•
No County Franchise Fees:
Gabrielson County - Utilities LOST collections Phipps city
$559,404
60.35%
Distributions without any Franchise fees -->
$337,600
Kendall city
7.35%
$41,116
UninCo
26.37%
$147,515
City of Phipps implements a Franchise Fee:
Gabrielson Co – remaining LOST Utilitiy Coll Phipps city
$221,804
$337,600
Reduction $0
Kendall city
$16,303
($24,814)
UninCo
$58,490
($89,025)
Total effect of applied Franchise Fee:
Gabrielson Co - remaining LOST Utilitiy Coll Phipps city
$221,804
$484,611
Reduction $0
Kendall city
$16,303
($24,814)
UninCo
$58,490
($89,025)
Hotel/Motel Tax
• State imposed hotel motel tax rate = 5%
• Locally imposed hotel motel tax can be imposed in full
percentage points from 1% to 7%. The tax is filed and
remitted with quarterly sales tax returns, and distributed
quarterly
• Each city or county receives 100% of the locally imposed
revenues collected by permit holders within the
jurisdiction.
• History of total of funds distributed to cities and counties
FY2013-$45,665,767
FY2010 -$36,773,000
FY2012-$43,264,029
FY2009 -$39,119,000
FY2011-$40,083,868
FY2008 -$38,018,962
Sales and Use Tax Reports
•
The Department publishes five reports each fiscal year
– Four Quarterly Reports
– One Annual Report
The quarterly reports contain the following information
• Statewide retail sales tax information by business group
• Retail, Consumer and Motor Vehicle Use Tax information
• Retail sales tax information by county and by each city within the
county
• Retail sales tax information by business group within each county
The annual report compiles the quarterly reports and includes much more tax
information on a fiscal year basis.
•
The report is available as a pdf document and the tables are also presented as
a spreadsheet
•
These reports can be accessed on the Department of Revenue Website
Changes to Sales and Use Tax Reports
• Beginning with the March 2013 quarterly report, changes
were made to the spreadsheet
• County tables were adjusted to allow for sorting and
filtering
• Taxable sales and tax by County and City
• Taxable sales and tax by County and Business
Group
• Goal was to allow the reader to more easily work with
the data
• Sort highest to lowest within and across counties
• Filter to one business group and compare across
counties
County and City Table
Iowa Retail Sales Tax
By County and City
Quarter Ending March 31, 2013
County
Adair
Adair
Adair
Adair
Adair
Adair
Adair
Adair
Adams
Adams
Adams
Allamakee
Allamakee
Allamakee
Allamakee
Allamakee
Allamakee
Allamakee
Allamakee
City
Adair
Bridgewater
Fontanelle
Greenfield
Orient
Stuart
Other
County Totals
Corning
Other
County Totals
Harpers Ferry
Lansing
New Albin
Postville
Waterville
Waukon
Other
County Totals
Number of
Returns
Taxable Sales
Computed Tax Percent of Tax
54
$1,977,753
$117,933
0.03%
11
$317,042
$19,023
0.00%
37
$779,108
$46,746
0.01%
107
$5,436,620
$325,847
0.07%
18
$225,595
$13,536
0.00%
35
$2,127,062
$124,708
0.03%
11
$575,626
$34,538
0.01%
273
$11,438,806
$682,331
0.15%
126
$7,038,323
$421,782
0.09%
29
$269,420
$16,165
0.00%
155
$7,307,743
$437,948
0.09%
33
$335,841
$20,094
0.00%
81
$2,225,049
$133,287
0.03%
30
$468,732
$28,124
0.01%
78
$3,746,294
$224,768
0.05%
11
$112,934
$6,776
0.00%
227
$12,760,892
$763,787
0.17%
34
$265,998
$15,960
0.00%
494
$19,915,740
$1,192,796
0.26%
County and Business Group Table
Sales and Use Tax Questions?
• We are very interested in knowing if you
find these changes beneficial.
• If you have any questions or any
suggestions on how The Department of
Revenue may improve the sales and use
tax reports or provide other sales and use
tax information please contact.
Name:
Joel Phipps
Phone Number: 515-242-6224
QUESTIONS ??? the
End
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