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 F riday, 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.
Aerobic clothing | Formal clothing-sold not rented | Raincoats and hats |
Antique clothing | Fur coats and stoles | Religious clothing |
Aprons-household | Galoshes | Riding pants |
Athletic socks | Garters and garter belts | Robes |
Baby bibs | Girdles | Rubber thongs-"flip-flops" |
Baby clothes-generally | Gloves-cloth, dress and leather | Running shoes without cleats |
Baseball caps | Golf clothing-caps, dresses, shirts and | Safety shoes (adaptable for street wear) |
Bathing suits | skirts | Sandals |
Belts with buckles attached | Graduation caps and gowns-sold not | Shawls |
Blouses | rented | Shirts |
Boots-general purpose | Gym suits and uniforms | Shoe inserts and laces |
Bow ties | Hats | Stockings |
Bowling shirts | Hiking boots | Suits |
Bras | Hooded (sweat) shirts | Support hose |
Bridal apparel-sold not rented | Hosiery, including support hosiery | Suspenders |
Camp clothing | Jackets | Sweatshirts |
Caps-sports and others | Jeans | Sweatsuits |
Chefs' uniforms | Jerseys for other than athletic wear | Swim trunks |
Children's novelty costumes | Jogging apparel | Tennis dresses |
Choir robes | Knitted caps or hats | Tennis skirts |
Clerical garments | Lab coats | Ties |
Coats | Leather clothing | Tights |
Corsets | Leg warmers | Trousers |
Costumes-Halloween, Santa Claus, | Leotards and tights | Tuxedos (except cufflinks)-sold not |
etc., sold not rented | Lingerie | rented |
Coveralls | Men's formal wear-sold not rented | Underclothes |
Cowboy boots | Neckwear, e.g., scarves | Underpants |
Dresses | Nightgowns and nightshirts | Undershirts |
Dress gloves | Overshoes | Uniforms-generally |
Dress shoes | Pajamas | Veils |
Ear muffs | Pants | Vests-general, for wear with suits |
Employee uniforms other than those | Pantyhose | Walking shoes |
primarily designed for athletic | Prom dresses | Windbreakers |
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 street |
Backpacks | Football pants | wear |
Ballet shoes | Football shoes | Shoes with cleats or spikes |
Barrettes | Goggles | Shoulder pads for dresses and jackets |
Baseball cleats | Golf gloves | Shower caps |
Baseball gloves | Ice skates | Skates-ice and roller |
Belt buckles sold without belts | In-line skates | Ski boots, masks, suits and vests |
Belts for weight lifting | Insoles | Special protective clothing or footwear |
Belts needing buckles but sold without | Jewelry | not adaptable for streetwear |
them | Key cases and chains | Sports helmets |
Bicycle shoes with cleats | Knee pads | Sunglasses-except prescription |
Billfolds | Laundry services | Sweatbands-arm, wrist and head |
Blankets | Life jackets and vests | Swim fins, masks and goggles |
Boutonnieres | Luggage | Tap dance shoes |
Bowling shoes-rented and sold | Monogramming services | Thread |
Bracelets | Pads-elbow, knee and shoulder, | Vests-bulletproof |
Buttons | football and hockey | Weight lifting belts |
Chest protectors | Patterns | Wrist bands |
Clothing repair | Protective gloves and masks | Yard goods |
Coin purses | Purses | Yarn |
Corsages | Rental of clothing | Zippers |
Dry cleaning services | Rental of shoes or skates | |
Elbow pads | Repair of clothing | |
Employee uniforms primarily designed for athletic activities or protective use | Roller blades |
This rule is intended to implement Iowa Code section 423.3(68).
Iowa Admin. Code r. 701-220.8