EXAMPLE 1: Company X contracts with Agency Z, an Iowa employment agency, to secure employment for an employee to work at a production plant in Illinois. Agency Z finds a suitable employee who is hired by Company X. Because the employee's principal place of employment is outside the state, this service is not subject to Iowa sales tax.
EXAMPLE 2: Company B, a sales company, contracts with Agency C, an employment agency, to secure a salesperson to travel throughout Iowa, Missouri, and Nebraska. Both Company B and Agency C are located in Iowa. Agency C is successful in finding a salesperson for Company B. Though the salesperson will be traveling throughout the three states, because Company B, the principal place of the salesperson's employment, is located within Iowa, Agency C's service is subject to Iowa sales tax.
This rule is intended to implement Iowa Code section 423.2(6)"ap" and "aq."
Iowa Admin. Code r. 701-211.23