Combined cable television and cable services. The Department makes every effort to keep this list up to date. However, see Iowa Code section 423.2 (and Iowa Administrative Code chapter 701-26) for the official list of taxable services in Iowa. The following is not an exhaustive list of exemptions, but rather illustrates those that most commonly relate to services that would otherwise be taxable.
To read all the exemptions, see sections 423.3 of the Iowa Code for sales tax and 423.6 for use tax. Retail sales of tangible items in California are generally subject to sales tax. Examples include furniture, gift items, toys, antiques, and clothing. Some labor services and associated costs are subject to sales tax if they are involved in the creation or manufacture of new personal property.
For more information on sales and use tax administered by the California Department of Tax and Rate Management, visit the California Sales and Use Tax home page. Two different sales not related to the seller's normal business activity within a 12-month period are not considered typical and are therefore not taxable. The challenge for businesses is to determine which services are taxable in states where they have a nexus (the obligation to collect sales tax). Examples include telephone answering services, credit reporting agencies and credit bureaus, and extermination services.
Once again, it's confusing; each of these states taxes a different set of services, making it difficult for service companies to understand what state laws require them to file a return, as well as what specific elements of their services are taxable. The most common example of a purchase subject to use tax is the purchase of an item for use in California from a retailer in another state. Many companies that offer customer service, installation, or warranty along with the sale of a physical asset need to hire an army of accountants to determine what is taxable and what is exempt. If the main purpose of the transaction (the true object) is the sale of taxable goods or equipment, the entire transaction is subject to sales tax.
However, if a service is sold together with a tangible product, but the product is secondary or incidental, the service may not be taxable at all. For example, a new Kentucky law recently added veterinary care, yard work, and camping rentals to the list of service providers who must charge a 6 percent sales tax. However, services provided to most nonprofit entities, churches and religious organizations are generally taxable. Generally, when you buy or obtain a taxable service outside of Iowa for use in Iowa, you are subject to Iowa's use tax.
While the list of examples of services subject to sales tax is not intended to be exhaustive, it should be used as a guide to answer your questions about the application of sales tax to these services. Each of these states taxes a different set of services, making it difficult for service companies to understand what state laws require them to file a return, as well as what specific elements of their services are taxable.
