Iowa Administrative Code › Agency 701 - Revenue Department › Title III - Sales, Use, and Excise Tax › Chapter 205 - Sourcing of Taxable Services, Tangible Personal Property, and Specified Digital Products › Rule 701-205.3 - First Use of Services Performed on Tangible Personal Property

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
First
				use of services performed on tangible personal property defined.
A
				service performed on tangible personal property is a service that changes some
				aspect of the property, such as its appearance or function. Services with
				respect to tangible personal property, but not necessarily performed on
				tangible personal property, such as inspection and appraisal, are not addressed
				in this rule. Except as otherwise provided in the agreement or the rules
				adopted by the governing board, a service performed on tangible personal
				property is first used at, and sourced to, the location where the customer
				receives, regains possession of, or can potentially make first use of, whether
				or not actually used, the tangible personal property on which the seller
				performed the service. In general, this is the location where the tangible
				personal property is returned to the purchaser or the purchaser's
				donee.
(2)
Sourcing of
				taxable services performed on tangible personal property as applied to local
				option sales and services tax.
A local option sales and services tax
				shall be imposed on the same basis as the state sales and services tax. With
				respect to sourcing of taxable services performed on tangible personal
				property, the local option sales and services tax sourcing rules shall be the
				same as the destination sourcing requirements described in Iowa Code section
				423.15 and as set forth in rules
				701-205.1 (423) and
				701-205.2 (423) and subrule
				205.3(1). However, the location of the taxable service performed on tangible
				personal property shall be sourced to the taxing jurisdiction, rather than to
				the state, where the customer regains possession or can potentially make first
				use of the tangible personal property on which the seller performed the
				service. Iowa does not impose a local option use tax.
(3)
Specific examples of taxable
				enumerated services.
Specific examples of services performed on
				tangible personal property taxable in Iowa under Iowa Code section
				423.2 include, but are not
				limited to:
a. Alteration and garment
				repair;
b. Vehicle repair and
				vehicle wash and wax;
c. Boat
				repair;
d. Carpentry;
e. Roof, shingle, and glass repair;
f. Dry cleaning, pressing, dyeing, and
				laundering;
g. Electrical and
				electronic repair and installation;
h. Farm implement repair of all
				kinds;
i. Furniture, rug, carpet,
				and upholstery repair and cleaning;
j. Gun and camera repair;
k. Household appliance, television, and radio
				repair;
l. Jewelry and watch
				repair;
m. Machine repair of all
				kinds, including office and business machine repair;
n. Motor repair;
o. Motorcycle, scooter, and bicycle
				repair;
p. Pet grooming;
q. Wood preparation;
r. Sewing and stitching;
s. Shoe repair and shoeshine; and
t. Taxidermy services.