Important Changes for Those Who File Iowa Sales and Use Tax Returns




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Aug 01, 2022

By Dominic Foushi, CPA Senior Accountant at Terry Lockridge & Dunn

Dominic Foushi, Staff AccountantOn June 17th, 2022, Governor Kim Reynolds signed into law Senate File 2367 which includes several changes as it relates to permit registration, return filing, and tax payments for sales and use tax. These changes have gone into effect for sales and use tax collected beginning July 1, 2022. The Iowa Department of Revenue has already begun reaching out to affected taxpayers notifying them of these changes.

Senate File 2367 makes updates to those who file both sales and use tax returns. Beginning July 1, 2022, sales and use tax will be filed on a single return whereby only one permit will be required for each tax type. Taxpayers will no longer need two separate permits for each tax type, but rather a single permit will be automatically created for both sales and use tax filings. The Department will automatically cancel any unneeded permits on behalf of the taxpayer.

Additionally, there are several other notable changes as it relates to the timing of filing & paying sales and use tax. Beginning in July, taxpayers who collect more than $1,200 in sales and use tax per year will be required to file returns and pay taxes monthly. Any taxpayers who collect less than $1,200 in sales and use tax per year will be required to file returns and pay taxes annually. The Department has already begun mailing letters to existing permit holders outlining any permit changes and updated filing expectations.

Semimonthly and monthly “deposits” are no longer required as tax payments will be due at the time a sales and use tax return is filed. For monthly return filers, both the return and payment will be due on the last business day of the following month (Example: Sales tax collected in July must have a return filed and payment made by August 31st). Returns and payments for annual filers will be due January 31st of the following year.

These payments must be made electronically as any payments not made electronically may incur a penalty. The Department strongly encourages all taxpayers to file & pay using the GovConnectIowa online system. If not already done so, taxpayers can create a GovConnectIowa account by visiting https://govconnect.iowa.gov/.

If you have any questions on this matter, you may reach out to Dominic at dfoushi@tld-inc.com or any of the accountants at Terry Lockridge & Dunn. They can be reached in Cedar Rapids at 319-364-2945, or in Iowa City at 319-339-4884.



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