(1)
In general. The sales
price on the warehousing of raw agricultural products is subject to sales tax
unless the warehousing of raw agricultural products is storage in transit and
has a destination outside of Iowa, regardless of whether the raw agricultural
products originated within or outside of Iowa. Because the tax imposed by Iowa
Code section 423.2(6)
"ax" is imposed on the warehousing and not the sale of raw
agricultural products, the interstate commerce exceptions found in Iowa Code
section 423.3 do not apply.
(2)
Definition. For purposes
of this rule:
"Raw agricultural products" includes but is
not limited to corn, beans, oats, milo, fruits, vegetables, animal semen, and
like items that have not been subjected to any form of processing. For purposes
of this rule, grain drying is not considered processing.
(3)
Other charges. Other
charges relating to warehousing of raw agricultural products may be subject to
sales tax when separately invoiced. 701-Chapter 206 contains more information
about bundled transactions.
(4)
Transit warehouses. The warehousing of raw agricultural
products to be delivered within Iowa is subject to sales tax, while the
warehousing of those products placed into interstate commerce is not subject to
sales tax.
a.
Formula.
Transit warehouses may compute the tax on warehousing fees based upon a formula
consisting of a numerator that is the quantity of raw agricultural products
housed at the warehouse with intended intrastate delivery in Iowa and a
denominator that is the total quantity of raw agricultural products housed in
the warehouse.
b.
Definition. For purposes of this rule:
"Transit warehouses" are those warehouses
where raw agricultural products in bulk quantities are transported to and then
shipped to different locations at different times.
c.
Numerator. Raw
agricultural products picked up at the warehouse or delivered to a location in
Iowa must be included in the numerator, even if the products may be or are
subsequently delivered to a common carrier for shipment outside of
Iowa.
d.
Information used
to calculate tax. The information used in the formula for the
computation of tax on storage fees must be, in most cases, supplied by the
principal storing the products in the warehouse. The warehouse is responsible
for acquiring and verifying the information used in the formula with the
principal at least once every 90 days.
(5)
Exemptions. Warehousing
service will not be subject to sales tax if a contract for the warehousing of
raw agricultural products is with a tax-certifying or tax-levying body of the
state of Iowa; any instrumentality of the state, county, or municipal
government; the federal government or its instrumentalities; a tribal
government as defined in Iowa Code section
216A.161; or an agency or
instrumentality of a tribal government if used for public purposes.
a.
Consignment to federal
government. Fees for the warehousing of raw agricultural products
placed into storage by a producer that are later consigned to the federal
government under a loan agreement are subject to sales tax.
b.
Federal government
activity. Warehousing of raw agricultural products is exempt from
sales tax only if the federal government makes payment to the warehouse for
warehousing and the federal government actually owns the products or goods
during the time the products or goods are warehoused.
This rule is intended to implement Iowa Code sections
423.2(6)
"ax" and 423.3(31).
