Tax is not due on the sale or use of a qualifying article of clothing or footwear if the sales price of the article is less than $100 and the sale takes place during a period beginning at 12:01 a.m. on the first Friday in August and ending at 12 midnight of the following Saturday. For example, in the year 2004, this period began at 12:01 a.m. on Friday, August 6, and ended at 12 midnight on Saturday, August 7. Eligible purchases of clothing and footwear are exempt from local option sales taxes as well as Iowa state sales tax.
"Accessories" includes, but is not limited to, jewelry, handbags, purses, briefcases, luggage, wallets, watches, cufflinks, tie tacks and similar items carried on or about the human body, without regard to whether worn on the body in a manner characteristic of clothing.
"Clothing or footwear" means an article of wearing apparel designed to be worn on or about the human body. For the purposes of this rule, the term does not include accessories or special clothing or footwear or articles of wearing apparel designed to be worn by animals.
"Eligible property" means an item of a type, such as clothing, that qualifies for Iowa's sales tax holiday.
"Special clothing or footwear" is clothing or footwear primarily designed for athletic activity or protective use and which is not normally worn except when used for the athletic activity or protective use for which it is designed.
EXAMPLE 1. A retailer advertises pants as "buy one, get one free." The first pair of pants is priced at $120; the second pair of pants is free. Tax is due on $120. Having advertised that the second pair is free, the store cannot ring up each pair of pants for $60 in order for the items to qualify for the exemption. However, if the retailer advertises and sells the pants for 50 percent off, selling each pair of $120 pants for $60, each pair of pants qualifies for the exemption.
EXAMPLE 2. A retailer advertises shoes as "buy one pair at the regular price, get a second pair for half price." The first pair of shoes is sold for $100; the second pair is sold for $50 (half price). Tax is due on the $100 shoes, but not on the $50 shoes. Having advertised that the second pair is half price, the store cannot ring up each pair of shoes for $75 in order for the items to qualify for the exemption. However, if the retailer advertises the shoes for 25 percent off, thereby selling each pair of $100 shoes for $75, each pair of shoes qualifies for the exemption.
EXAMPLE 3. A retailer advertises shirts as "buy two for the price of one" for $140. Tax is due on $140. Each shirt cannot be rung up as costing $70. However, as described in Examples 1 and 2 above, the $140 cost of each shirt can be discounted to bring the price of each shirt within the exemption's limitation.
EXAMPLE. A customer purchases a $35 shirt during the exemption period. After the exemption period ends, the customer exchanges the shirt for the same shirt in a different size. Tax is not due on the $35 price of the shirt.
EXAMPLE. A customer purchases a $35 shirt during the exemption period. After the exemption period ends, the customer exchanges the shirt for a $35 jacket. Because the jacket was not purchased during the exemption period, tax is due on the $35 price of the jacket.
EXAMPLE. During the exemption period, a customer purchases a $90 dress that qualifies for the exemption. Later, during the exemption period, the customer exchanges the $90 dress for a $150 dress.
Tax is due on the $150 dress. The $90 credit from the returned item cannot be used to reduce the sales price of the $150 item to $60 for exemption purposes.
EXAMPLE. Before the exemption period, a customer purchases a $60 dress. Later, during the exemption period, the customer exchanges the $60 dress for a $95 dress. Tax is not due on the $95 dress because it was purchased during the exemption period and otherwise meets the qualifications for the exemption.
Adult diapers | Formal clothing-sold not rented | Raincoats and hats |
Aerobic clothing | Fur coats and stoles | Religious clothing |
Antique clothing | Galoshes | Riding pants |
Aprons-household | Garters and garter belts | Robes |
Athletic socks | Girdles | Rubber thongs-"flip-flops" |
Baby bibs | Gloves-cloth, dress and leather | Running shoes without cleats |
Baby clothes-generally | Golf clothing-caps, dresses, | Safety shoes (adaptable for street |
Baby diapers | shirts and skirts | wear) |
Baseball caps | Graduation caps and gowns-sold | Sandals |
Bathing suits | not rented | Shawls |
Belts with buckles attached | Gym suits and uniforms | Shirts |
Blouses | Hats | Shoe inserts and laces |
Boots-general purpose | Hiking boots | Stockings |
Bow ties | Hooded (sweat) shirts | Suits |
Bowling shirts | Hosiery, including support hosiery | Support hose |
Bras | Jackets | Suspenders |
Bridal apparel-sold not rented | Jeans | Sweatshirts |
Camp clothing | Jerseys for other than athletic wear | Sweatsuits |
Caps-sports and others | Jogging apparel | Swim trunks |
Chefs' uniforms | Knitted caps or hats | Tennis dresses |
Children's novelty costumes | Lab coats | Tennis skirts |
Choir robes | Leather clothing | Ties |
Clerical garments | Leg warmers | Tights |
Coats | Leotards and tights | Trousers |
Corsets | Lingerie | Tuxedos (except cufflinks)-sold |
Costumes-Halloween, Santa | Men's formal wear-sold not | not rented |
Claus, etc., sold not rented | rented | Underclothes |
Coveralls | Neckwear, e.g., scarves | Underpants |
Cowboy boots | Nightgowns and nightshirts | Undershirts |
Diapers-cloth and disposable | Overshoes | Uniforms-generally |
Dresses | Pajamas | Veils |
Dress gloves | Pants | Vests-general, for wear with suits |
Dress shoes | Pantyhose | Walking shoes |
Ear muffs | Prom dresses | Windbreakers |
Employee uniforms other than those primarily designed for athletic activity or protective use | Ponchos | Work clothes |
Accessories-generally | Fabric sales | Safety clothing |
Alterations of clothing | Fishing boots (waders) | Safety glasses |
Athletic supporters | Football pads | Safety shoes-not adaptable for |
Backpacks | Football pants | street wear |
Ballet shoes | Football shoes | Shoes with cleats or spikes |
Barrettes | Goggles | Shoulder pads for dresses and |
Baseball cleats | Golf gloves | jackets |
Baseball gloves | Ice skates | Shower caps |
Belt buckles sold without belts | In-line skates | Skates-ice and roller |
Belts for weight lifting | Insoles | Ski boots, masks, suits and vests |
Belts needing buckles but sold | Jewelry | Special protective clothing or |
without them | Key cases and chains | footwear not adaptable for |
Bicycle shoes with cleats | Knee pads | streetwear |
Billfolds | Laundry services | Sports helmets |
Blankets | Life jackets and vests | Sunglasses-except prescription |
Boutonnieres | Luggage | Sweatbands-arm, wrist and head |
Bowling shoes-rented and sold | Monogramming services | Swim fins, masks and goggles |
Bracelets | Pads-elbow, knee and shoulder, | Tap dance shoes |
Buttons | football and hockey | Thread |
Chest protectors | Patterns | Vests-bulletproof |
Clothing repair | Protective gloves and masks | Weight lifting belts |
Coin purses | Purses | Wrist bands |
Corsages | Rental of clothing | Yard goods |
Dry cleaning services | Rental of shoes or skates | Yarn |
Elbow pads | Repair of clothing | Zippers |
Employee uniforms primarily designed for athletic activities or protective use | Roller blades |
This rule is intended to implement 2005 Iowa Code subsection 423.3(67).
Iowa Admin. Code r. 701-220.15