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 701-285.6 - Relief Agencies

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
				Relief agency means the state, any county, city and county, city or district
				thereof, or any agency engaged in actual relief work. Nonexclusive examples of
				relief agencies are Salvation Army, Royal Neighbors, and Masonic Lodge. The
				sales of tangible personal property or enumerated services to relief agencies
				are subject to tax. A relief agency may apply to the director for refund of the
				amount of tax imposed and paid by it, upon the purchase of goods, wares,
				merchandise, or services rendered, furnished, or performed that are used for
				free distribution to the poor and needy.
(2) Persons are determined to be in the poor
				and needy category when their incomes and resources are at or below poverty
				level. The department will use federal poverty guidelines in making this
				determination.
(3) Listed below are
				some examples where the tax may or may not be refunded to the relief agency:
EXAMPLE: A relief agency purchases clothing for free
				  distribution to a poor and needy person. The tax is refundable.
EXAMPLE: A relief agency pays the gas, light, or telephone
				  bill for a person who is poor and needy. The tax is refundable.
EXAMPLE: An agency purchases items of clothing for residents
				  of their living facility, and is partially reimbursed by the person using the
				  items based upon the recipient's ability to pay. Tax on the portion of cost not
				  recovered by the agency can be claimed as a refund of tax paid by using formula
				  stated in 18.6(6).
(4)
				Demolition v. repair costs. A nonprofit noneducational relief agency is not
				entitled to a refund of sales tax paid by contractors on building materials
				used in the alteration, expansion, repair, remodeling or construction of the
				facility since the materials were sold tax paid to the contractor who is the
				consumer of the material by statute. See Iowa Code section
				422.42(9).
				However, the relief agency would be entitled to a refund of sales tax paid on
				the cost of the demolition of the building since the demolition of the building
				indirectly benefited the poor and needy. 1968 O.A.G. #841.
EXAMPLE: A relief agency, which is not part of a governmental
				  unit, operates a home or orphanage for persons who are poor and needy or for
				  orphan children. Food, lodging, and necessary items are furnished
				  free-of-charge to the residents. The relief agency would be entitled to a
				  refund of any taxes paid to operate this facility; such as, but not limited to,
				  lights, heat, water, telephone, and repair items or services needed to maintain
				  the facility.
(5) Claims for
				refund must be filed quarterly with the department within 45 days after the end
				of the quarter for which the refund is claimed. Claims are to be submitted on
				forms provided by the department.
The claim shall include the following information:
a. The total amount or amounts, valued in
				money, expended directly or indirectly for goods, wares, merchandise, or
				services rendered, furnished, or performed used for free distribution to the
				poor and needy.
b. List the persons
				making the sales to the relief agency.
1.
				Include the date of the sale.
2.
				Include the total amount expended, itemizing sales tax.
3. Include the date of payment.
4. Include the check number, receipt number,
				or paid invoice verifying payment.
c. List the total operating income received
				(residents, donations, etc.)
d.
				List the operating income received from residents only.
e. The claim shall be signed by an authorized
				agent of the relief agency.