Iowa Admin. Code r. 701-203.1
When a retailer prices an article for retail sale and displays or advertises the same to the public with that price marked, the price so marked or advertised shall include only the sales price of such article unless it is stated on the price tag that the price includes tax.
EXAMPLE: The advertised or marked price is $1. When a sale is made, the purchaser must pay tax in addition to the $1 sales price or agree to pay $1.07, which represents the purchase price plus state sales tax of 6 percent plus local option sales tax of 1 percent, which, when added, becomes a part of the sale price or charge.
This rule does not prohibit advertising or displaying the sale price plus tax or the price including tax, as shown in the following examples:
"This dress-$10 plus tax" or "This dress-$10.70 including tax."
When a retailer conspicuously advertises in such manner and position so that it may be readily seen and read by the public that the price "includes tax," the retailer will be allowed to determine sales price by dividing the total of such retailer's price which includes tax by the applicable percentage. For example, a retailer in a jurisdiction that has the state sales tax rate of 6 percent plus a 1 percent local option tax would use a factor of 107 percent.
However, where an invoice is given to the purchaser as a part of the sale, either the invoice must show the tax separately from the retailer's price or it must be stated on each invoice that tax is included in the retailer's price. If the invoice states "tax included," the seller may determine sales price by the applicable percent method described above. It shall be the responsibility of the retailer that uses or has used the applicable percent method for reporting to provide proof that the retailer has complied with the method of advertising or displaying the retailer's price, as described above.
This rule is intended to implement Iowa Code sections 423.14 and 423.24.
Iowa Admin. Code r. 701-203.1
ARC 8152C, IAB 7/24/24, effective 8/28/24