Warranty

Iowa Sales Tax: Extended Warranty

[Author: Tom Junge, Iowa Field Director, 2016 | Keywords: Iowa Legislation, Sales Tax, Warranty] With the influx of extended warranty sales by dealers (John Deere PowerGard, Case Protection Plan, New Holland Purchased Protection Plans and AGCO Protection) and the number of calls I have received from dealers since this topic was mentioned in the November Retailer, I felt it would be good to revisit this topic. Hopefully, the table below will cover this topic in a simple, easy-to-read format. Iowa Sales Tax Table Dealer to Customer Dealer to Manufacturer Sale of Base/Mandatory Warranty The cost of the base warranty is part of… Read More »

Extended or Optional Warranty

[2013 | Keywords: Sales Tax, Warranty] Q: Would an optional warranty be taxed on a tractor that qualifies for the ag exemption? A: Correct. The optional warranty is a separate sale of tangible personal property. So while the tractor (and replacement parts) used in ag production is exempt, that does not exempt the sale of a repair warranty from tax. A tractor repair warranty is not a tractor, nor a replacement part for a tractor. Greg Stokke, Greg [IDR] Greg.Stokke@Iowa.gov Thu 3/28/2013 701—18.25 (422,423) Warranties and maintenance contracts. 18.25(1) In general—definitions. “Mandatory warranty.” A warranty is mandatory within the meaning… Read More »