Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 20 - Filing and Extension of Tax Liens and Charging Off Uncollectible Tax Accounts › Rule 701-20.12 - Exempt Sales of Clothing and Footwear During Two-day Period in August

Current through Register Vol. 47, No. 3, July 24, 2024
Tax is not due on the sale or use of a qualifying article of
				  clothing or footwear if the sales price of the article is less than $100 and
				  the sale takes place during a period beginning at 12:01 a.m. on the first
				  Friday in August and ending at 12 midnight of the following Saturday. For
				  example, in the year 2000, this period begins at 12:01 a.m. on Friday, August
				  4, and ends at 12 midnight on Saturday, August 5. Eligible purchases of
				  clothing and footwear are exempt from local option sales taxes as well as Iowa
				  state sales tax.
(1)
Definitions.
The following words and terms, when used in this
				rule, shall have the following meanings, unless the context clearly indicates
				otherwise.
"Accessories"
include but are not limited to
				  jewelry, handbags, purses, briefcases, luggage, wallets, watches, cufflinks,
				  tie tacks and similar items carried on or about the human body, without regard
				  to whether worn on the body in a manner characteristic of clothing.
"Clothing or footwear"
means an article of
				  wearing apparel designed to be worn on or about the human body. For the
				  purposes of this rule, the term does not include accessories or special
				  clothing or footwear or articles of wearing apparel designed to be worn by
				  animals.
"Special clothing or footwear"
is clothing
				  or footwear primarily designed for athletic activity or protective use and
				  which is not normally worn except when used for the athletic activity or
				  protective use for which it is designed.
(2)
Exempt sales.
The
				exemption applies to each article of clothing or footwear selling for less than
				$100, regardless of how many items are sold on the same invoice to a customer.
				For example, if a customer purchases two shirts for $80 each, both items
				qualify for the exemption even though the customer's total purchase price
				($160) exceeds $99.99. The exemption does not apply to the first $99.99 of an
				article of clothing or footwear selling for more than $99.99. For example, if a
				customer purchases a pair of pants costing $110, sales tax is due on the entire
				$110.
(3)
Taxable
				sales.
This exemption does not apply to sales of the following goods
				or services:
a. Any special clothing or
				footwear that is primarily designed for athletic activity or protective use and
				that is not normally worn except when used for the athletic activity or
				protective use for which it is designed. For example, golf cleats and football
				pads are primarily designed for athletic activity or protective use and are not
				normally worn except when used for those purposes; therefore, they do not
				qualify for the exemption. However, tennis shoes, jogging suits, and swimsuits
				are commonly worn for purposes other than athletic activity and qualify for the
				exemption.
b. Accessories,
				including jewelry, handbags, purses, briefcases, luggage, umbrellas, wallets,
				watches, and similar items carried on or about the human body, without regard
				to whether they are worn on the body in a manner characteristic of
				clothing.
c. The rental of any
				clothing or footwear. For example, this exemption does not apply to rentals of
				formal wear, costumes, diapers, and bridal gowns, but would apply to sales of
				the above items.
d. Taxable
				services performed on the clothing or footwear, such as garment and shoe
				repair, dry cleaning or laundering, and alteration services. Sales tax is due
				on alterations to clothing, even though the alteration service may be
				performed, invoiced and paid for at the same time as the clothing is being
				purchased. If a customer purchases a pair of pants for $90 and pays $15 to have
				the pants cuffed, the $90 charge for the pants is exempt, but tax is due on the
				$15 alteration charge.
e. Purchases
				of items used to make, alter, or repair clothing or footwear, including fabric,
				thread, yam, buttons, snaps, hooks, belt buckles, and zippers.