§ 423.36 — Permits required to collect sales or use tax — applications — revocation

Iowa § 423.36

• Jurisdiction: Iowa
• Title X: FINANCIAL RESOURCES
• Ch. 423: STREAMLINED SALES AND USE TAX ACT

Text

1. A person shall not engage in or transact business as a retailer making taxable sales of
tangible personal property, specified digital products, or furnishing services within this state
or as a retailer making taxable sales of tangible personal property, specified digital products,
or furnishing services for use within this state, unless a permit has been issued to the retailer
under this section, except as provided in subsection 7. Every person desiring to engage in
or transact business as a retailer shall file with the department an application for a permit to
collect sales or use tax. Every application for a sales or use tax permit shall be made upon a
form prescribed by the director and shall set forth any information the director may require.
The application shall be signed by an owner of the business if a natural person; in the case of
a retailer which is an association or partnership, by a member or partner; and in the case of a
retailer which is a corporation, by an executive officer or some person specifically authorized
by the corporation to sign the application, to which shall be attached the written evidence of
the person’s authority.
2. a. Notwithstanding subsection 1, if any person will make taxable sales of tangible
personal property, specified digital products, or furnish services to any state agency, that
person shall, prior to the sale, apply for and receive a permit to collect sales or use tax
pursuant to this section. A state agency shall not purchase tangible personal property,
specified digital products, or services from any person unless that person has a valid,
unexpired permit issued pursuant to this section and is in compliance with all other
requirements in this chapter imposed upon retailers, including but not limited to the
requirement to collect and remit sales and use tax and file sales and use tax returns.
b. For purposes of this subsection, “state agency” means any executive, judicial, or
legislative department, commission, board, institution, division, bureau, office, agency, or
other entity of state government.
3. To collect sales or use tax, the applicant must have a permit for each place of business
in the state of Iowa. The department may deny a permit to an applicant who is substantially
delinquent in paying a tax due, or the interest or penalty on the tax, administered by the
department at the time of application or if the applicant had a previous delinquent liability
with the department. If the applicant is a partnership, a permit may be denied if a partner
is substantially delinquent in paying any delinquent tax, penalty, or interest or if a partner
had a previous delinquent liability with the department. If the applicant is a corporation,
a permit may be denied if any officer having a substantial legal or equitable interest in the
ownership of the corporation owes any delinquent tax, penalty, or interest or if any officer
having a substantial legal or equitable interest in the ownership of the corporation had a
previous delinquent liability with the department.
4. a. The department shall grant and issue to each applicant a permit for each place of
business in this state where sales or use tax is collected. A permit is not assignable and is
valid only for the person in whose name it is issued and for the transaction of business at the

place designated or at a place of relocation within the same county if the ownership remains
the same.
b. If an applicant is making sales outside Iowa for use in this state or furnishing services
outside Iowa, the product or result of which will be used in this state, that applicant shall be
issued one sales or use tax permit by the department applicable to these out-of-state sales or
services.
c. If an applicant is required to collect sales or use tax and is not included in the definition
of a retailer maintaining a place of business in this state in section 423.1, subsection 48,
paragraph “a”, subparagraph (1), the applicant shall be issued one sales or use tax permit by
the department regardless of the number of locations from which sales are made.
5. Permits issued under this section are valid and effective until revoked by the
department.
6. If the holder of a permit fails to comply with any of the provisions of this subchapter or
ofsubchapterIIorIIIoranyorderorruleofthedepartmentadoptedunderthosesubchapters
or is substantially delinquent in the payment of a tax administered by the department or the
interest or penalty on the tax, or if the person is a corporation and if any officer having a
substantiallegalorequitableinterestintheownershipofthecorporationowesanydelinquent
tax of the permit-holding corporation, or interest or penalty on the tax, administered by the
department, the director may revoke the permit. The director shall send notice by mail to a
permit holder informing that person of the director’s intent to revoke the permit and of the
permit holder’s right to a hearing on the matter. If the permit holder petitions the director
for a hearing on the proposed revocation, after giving ten days’ notice of the time and place
of the hearing in accordance with section 17A.18, subsection 3, the matter may be heard
and a decision rendered. The director may restore permits after revocation. The director
shall adopt rules setting forth the period of time a retailer must wait before a permit may be
restored or a new permit may be issued. The waiting period shall not exceed ninety days
from the date of the revocation of the permit.
7. a. Sellerswhoarenotregularlyengagedinsellingatretailanddonothaveapermanent
place of business, but who are temporarily engaged in selling from trucks, portable roadside
stands, concessionaires at state, county, district, or local fairs, carnivals, or the like, shall
report and remit the sales tax on a seasonal basis, under rules the director shall provide for
the efficient collection of the sales tax. This subsection applies to sellers who are temporarily
engaged in furnishing services.
b. Persons engaged in selling tangible personal property, specified digital products, or
furnishingservicesshallnotberequiredtoobtainorretainasalesorusetaxpermitforaplace
of business at which taxable sales of tangible personal property, specified digital products, or
taxable performance of services will not occur.
8. The provisions of subsection 1, dealing with the lawful right of a retailer to transact
business,asapplicable,applytopersonshavingreceiptsfromfurnishingservicesenumerated
in section 423.2, except that a person holding a permit pursuant to subsection 1 shall not be
requiredtoobtainanyseparatesalesorusetaxpermitforthepurposeofengaginginbusiness
involving the services.
9. a. Except as provided in paragraph “b”, purchasers, users, and consumers of tangible
personal property, specified digital products, or enumerated services taxed pursuant to
subchapter II or III of this chapter or chapter 423B may be authorized, pursuant to rules
adopted by the director, to remit tax owed directly to the department instead of the tax being
collected and paid by the seller. To qualify for a direct pay tax permit, the purchaser, user,
or consumer must accrue a tax liability of more than eight thousand dollars in tax under
subchapters II and III in a monthly period and make deposits and file returns pursuant to
section 423.31. This authority shall not be granted or exercised except upon application to
the director and then only after issuance by the director of a direct pay tax permit.
b. The granting of a direct pay tax permit is not authorized for any of the following:
(1) Taxes imposed on the sales, furnishing, or service of gas, electricity, water, heat, pay
television service, and communication service.

(2) Taxes imposed under section 423.26, section 423.26A, and chapter 423C.