Iowa Administrative Code › Agency 701 - Revenue Department › Title III - Sales, Use, and Excise Tax › Chapter 220 - Exemptions Primarily of Benefit to Consumers › Rule 701-220.15 - 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 2004, this period began at 12:01 a.m. on Friday, August 6,
				  and ended at 12 midnight on Saturday, August 7. 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"
includes, but is 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.
"Eligible property"
means an item of a type,
				  such as clothing, that qualifies for Iowa's sales tax holiday.
"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.
a.
Required price.
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.
b.
Order date and
				back orders.
For the purpose of the sales tax holiday, eligible
				property qualifies for exemption if: the item is both delivered to and paid for
				by the customer during the exemption period; or the customer orders and pays
				for the item and the seller accepts the order during the exemption period for
				immediate shipment, even if delivery is made after the exemption period. The
				seller accepts an order when the seller has taken action to fill the order for
				immediate shipment. Actions to fill an order include placement ofan "in date"
				stamp on a mail order or assignment ofan "order number" to a telephone order.
				An order is for immediate shipment when the customer does not request delayed
				shipment. An order is for immediate shipment notwithstanding that the shipment
				may be delayed because of a backlog of orders or because stock is currently
				unavailable to, or on back order by, the seller.