The Iowa Department of Revenue (DOR) has provided guidance on its website regarding the state’s sales tax exemption for computers and computer peripherals. Iowa provides an exemption for computers used in processing or storage of data or information by an insurance company, financial institution, or commercial enterprise. The 2020 legislature added “computer peripherals” to the exemption. “Computer peripheral” means an ancillary device connected to the computer digitally, by cable, or by other medium, used to put information into or get information out of a computer. The DOR has provided non-exhaustive lists of which computers and computer peripherals are exempt and taxable if used in processing or storage of data or information by an insurance company, financial institution, or commercial enterprise. The following items are exempt:
The following items are taxable:
The DOR indicated that it will accept refund claims for sales and use tax paid on exempt computers and computer peripherals if the claim is within the statute of limitations and has not been denied by the DOR. Individuals and companies making sales and/or purchases of these items in Iowa will want to take special note of the guidance provided above. (Sales Tax Treatment of Computers and Computer Peripherals, Iowa DOR website)