For over 36 years, Iowa tax law has exempted “computers used in processing or storage of data or information by an insurance company, financial institution, or commercial enterprise.” In 2020, the Iowa tax law was expanded to include computer peripherals to this exemption, which according to Iowa Code is “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.” To help clarify what qualifies as computer peripheral, the Iowa Department of Revenue recently released guidance for taxpayers identifying which computer devices and computer peripheral are exempt from sales tax and which devices are taxable. Here is the list of exempt and taxable devices provided in the guidance:
Exempt
Desktop computers or towers
Laptops
Keyboard
Mouse
Monitors
Hard drives
Multi-functional devices
Printers
Scanners
Toughbooks
Smartphones (phones with internet capabilities)
Tablets
Docking stations
Port replicators
USB hubs
Discriminators
Flash drives
Thin clients
Zero clients
Wireless access points
Routers
Modems
Hotspots
Smart TVs
Servers
DVRs
Webcams
Taxable
Adapters
Firewall hardware
Digital displays or billboards
Hardware maintenance agreements
Computerized phone systems
Cell phones not including smartphones
Time clocks
Postage meters
Cables
Switches or switching equipment
Surveillance or security cameras
Uninterruptible power supplies
Power strips or surge protectors
Computer cases
Fluke meters
Testing equipment
Replacement parts
Pill counters or sorters
Satellite or cable television equipment
The guidance also states that the Department will accept refund claims for sales and use tax paid on exempt computers and computer peripherals if the refund claim is within the statute of limitations and has not been denied prior by the Department. If you have further questions of whether a certain device is taxable or exempt, our state and local tax team at BerganKDV can help. Contact us with your questions.
