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 701-285.21 - Morticians or Funeral Directors

Current through Register Vol. 47, No. 3, July 24, 2024
A mortician or funeral director is engaged in the business of
				  selling both tangible personal property and funeral services. Examples of the
				  former are caskets, other burial containers, flowers, and grave clothing.
				  Examples of the latter are cremation, transportation by hearse and embalming.
				  Tax is due only upon gross receipts from the sale of tangible personal property
				  and taxable services, and not upon gross receipts from the sale of nontaxable
				  services.
If a mortician or funeral director separately itemizes
				  charges for tangible personal property, taxable services and nontaxable
				  services, as required by the rules of the Federal Trade Commission, or Iowa
				  Code section 523A.8(1)
"b,"
whichever is applicable, tax is due only upon the gross
				  receipts from the sales of tangible personal property and taxable services. If
				  contrary to the rules or the statute, or if the applicable rules are rescinded
				  or the statute repealed, and the mortician or funeral director charges a lump
				  sum to a customer covering the entire cost of the funeral without dividing the
				  charges for sales of tangible personal property and taxable and nontaxable
				  services, the mortician or funeral director shall report the full amount of the
				  funeral bill less any cash advanced by the mortician or funeral director, with
				  tax due on 50 percent of the difference.
Kistner v. Iowa State Board of
				  Assessment and Review,
224 Iowa 404, 280 N.W. 587 (1938). Cash advance
				  items may include, but are not limited to, the following: cemetery or crematory
				  services, pallbearers, public transportation, clergy honoraria, flowers,
				  musicians, singers, nurses, obituary notices, gratuities, and death
				  certificates.
The mortician or funeral director is considered to be
				  purchasing caskets, outer burial containers, and grave clothing for resale, and
				  may purchase these items from suppliers without payment of tax. The mortician
				  or director should present the supplier with a certificate of resale as set out
				  in rule 701-15.3 (423). A mortician or
				  director is considered to be the user or consumer of office furniture and
				  equipment, funeral home furnishings, advertising calendars, booklets, motor
				  vehicles and accessories, embalming equipment, instruments, fluid and other
				  chemicals used in embalming, cosmetics, and grave equipment, stretchers,
				  baskets, and other items if title or possession does not pass to the customer.
Kistner,
supra.
For purposes of this rule, the terms of morticians or funeral
				  directors shall also include cemeteries, cemetery associations and anyone
				  engaged in activities similar to those discussed in the rule.
This rule is intended to implement Iowa Code sections
				  422.42(3),
				  422.43,
				  423.1 and
				  423.2.