Iowa Admin. Code r. 701-219.3

Current through Register Vol. 47, No. 11, December 11, 2024

Rule 701-219.3 - Sales of building materials, supplies, and equipment to contractors, subcontractors, builders, or owners

Suppliers or dealers that sell materials, and supplies, and equipment to contractors, subcontractors, builders, or owners are required to collect Iowa sales tax from those persons based upon the sales price from such sales. Reference 701-subrule 219.23(4), which deals with construction contracts with designated exempt entities, for an explanation of one of the few exceptions to this requirement. The fact that a contractor, subcontractor, or builder holds an Iowa retail sales tax permit and has a tax number does not entitle that person to purchase building materials, supplies, and equipment without paying sales tax to the vendor, unless the building materials, supplies, or equipment are purchased for resale. Materials purchased out of state for use in Iowa are subject to the Iowa use tax, which is payable in the tax period that the materials are delivered into the state.

(1)Examples of building materials and supplies. The following is a nonexhaustive list of typical items that are building materials and supplies:

Asphalt

Bricks

Builders' hardware

Caulking material

Cement

Central air-conditioning

Cleaning compounds

Conduit

Doors

Ducts

Electric wiring, connections, and switching devices

Fencing materials

Flooring¹

Glass

Gravel

Insulation

Lath

Lead

Lighting fixtures

Lime

Linoleum¹

Lubricants

Lumber

Macadam

Millwork

Modular and mobile homes

Mortar

Oil

Paint

Paper

Piping, valves, and pipe fittings

Plaster

Plates and rods used to anchor masonry foundations

Plumbing supplies

Polyethylene covers

Power poles, towers, and lines

Putty

Reinforcing mesh

Rock salt

Roofing

Rope

Sand

Sheet metal

Steel

Stone

Stucco

Tile

Wallboard

Wall coping

Water conditioners

Weather stripping

Windows

Window screens

Wire netting and screen

Wood preserver

(2)Examples of building equipment. Building equipment includes but is not limited to such items as: Compressors

Drill presses

Electric generators

Forms

Hand tools

Lathes

Replacement parts for equipment

Scaffolds

Tools

Vehicles including grading, lifting and excavating vehicles

(3)Taxability of equipment. Construction equipment purchased by a contractor that is intended for use in the performance of an Iowa construction contract is subject to the Iowa sales or use tax. Equipment that is rented for use on or in connection with an Iowa construction contract would normally be rented subject to tax. Rule 701-219.20 (423) provides an explanation of the existing exemption in favor of rented machinery used by a contractor on a job site.

This rule is intended to implement Iowa Code sections 423.2(1)"b" and 423.5.

¹ Floor coverings that are shaped to fit a particular room or area and that are attached to the supporting floor with cement, tacks or tack strips, or by some other method making a permanent attachment are considered to be building materials. Carpeting (whether attached to the floor or not) is not treated as a building material for the purposes of this chapter. Rugs, mats, and linoleum types of floor coverings that are not attached but are simply laid on finished floors are also not considered to be building materials.

Iowa Admin. Code r. 701-219.3

ARC 8161C, IAB 7/24/24, effective 8/28/24