Iowa Administrative Code › Agency 701 - Revenue Department › Title III - Sales, Use, and Excise Tax › Chapter 285 - Taxable and Exempt Sales Determined by Method of Transaction or Usage › Rule 701-285.39 - Sales or Services Rendered, Furnished, or Performed by a County or City

Current through Register Vol. 47, No. 3, July 24, 2024
The gross receipts from the sales, furnishing, or service of
				  gas, electricity, water, heat, and communication service rendered, furnished,
				  or performed by a county or city are subject to the tax. On and after July 1,
				  1985, the gross receipts from fees paid to cities and counties for the
				  privilege of participating in any athletic sports are also subject to tax. On
				  or after July 1, 1991, the gross receipts from any municipally owned pay
				  television service are taxable as well. On and after April 1, 1992, the gross
				  receipts from a county or municipality furnishing sewage service or solid waste
				  collection and disposal service to nonresidential commercial operations are
				  taxable (see rules 701-26.71 (422,423) and
				  26.72(422,423) for more information).
Any other sales or services rendered, furnished, or performed
				  by a county or city are not subject to the tax.
A "sport" is any activity or experience which involves some
				  movement of the human body and gives enjoyment or recreation. An "athletic"
				  sport is any sport which requires physical strength, skill, speed, or training
				  in its performance. The following activities are nonexclusive examples of
				  athletic sports: baseball, football, basketball, softball, volleyball, golf,
				  tennis, racquetball, swimming, wrestling, and foot racing.
The following is a list of various fees which would be
				  considered fees paid to a city or county for the privilege of participating in
				  any athletic sport, and thus subject to tax under this rule. The list is not
				  exhaustive.
1. Fees paid for the
				privilege of using any facility specifically designed for use by those playing
				an athletic sport: fees for use of a golf course, ball diamond, tennis court,
				swimming pool, or ice skating rink are subject to tax. These fees are subject
				to tax whether they allow use of the facility for a brief or extended period of
				time, e.g., a daily fee or season ticket for use of a swimming pool or golf
				course would be subject to tax. Group rental of facilities designed for playing
				an athletic sport would also be subject to tax.
2. Fees paid to enter any tournament or
				league which involves playing an athletic sport would be subject to tax. Both
				team and individual entry fees are taxable. Fees paid to enter any marathon or
				foot race of shorter duration would be subject to tax under this
				rule.
Not subject to tax as fees paid to a city or county for the
				  privilege of participating in any athletic sport under this rule are the
				  following charges. The list is not intended to be exhaustive.
1. Fees paid for lesson or instruction in how
				to play or to improve one's ability to play an athletic sport are not subject
				to tax. Golf and swimming lesson fees are specific examples of such nontaxable
				charges. The fees are excluded from tax regardless of whether the person
				receiving the instruction is a child or an adult. Fees charged for equipment
				rental, regardless of whether this equipment is helpful or necessary to
				participation in an athletic sport, are not subject to tax. The rental of a
				golf cart or moveable duck blind would not be subject to tax. The rental of a
				recreational boat is a transportation service, the gross receipts of which are
				not subject to tax if provided by a city or county.
2. Sales of merchandise, e.g., food or drink,
				to persons watching or participating in any athletic sport are not subject to
				tax.
3. Fees charged to improve any
				facility where any athletic sport is played are not subject to tax, unless such
				a fee must be paid to participate in an athletic sport which can be played
				within the facility.
4. Fees paid
				by any person or organization to rent any county or city facility or any
				portion of any county or city park shall not be subject to tax unless the
				portion of the park or facility is specifically designed for the playing of an
				athletic sport.
EXAMPLE: A local bridge club pays a fee to use a shelter
				  house and the surrounding grounds at a county park for a picnic. During the
				  course of the picnic, the club members set up a net and use the surrounding
				  grounds to play volleyball. They also improvise a softball field and play a
				  softball game there. The fee which the bridge club has paid to rent the shelter
				  house and surrounding grounds would not be subject to tax.
5. Fees paid for the use of a campground or
				hiking trail are not subject to tax.
This rule is intended to implement Iowa Code sections
				  422.43 and
				  422.45.