Iowa Admin. Code r. 701—219.3(423) — Sales of building materials, supplies, and equipment to contractors, subcontractors, builders, or owners

Suppliers or dealers that sell materials, and supplies, and equipment to contractors, subcontractors, builders, or owners are required to collect Iowa sales tax from those persons based upon the sales price from such sales. Reference 701—subrule 219.23(4) , which deals with construction contracts with designated exempt entities, for an explanation of one of the few exceptions to this requirement. The fact that a contractor, subcontractor, or builder holds an Iowa retail sales tax permit and has a tax number does not entitle that person to purchase building materials, supplies, and equipment without paying sales tax to the vendor, unless the building materials, supplies, or equipment are purchased for resale. Materials purchased out of state for use in Iowa are subject to the Iowa use tax, which is payable in the tax period that the materials are delivered into the state. 219.3(1) Examples of building materials and supplies. The following is a nonexhaustive list of typical items that are building materials and supplies: Asphalt Bricks Builders’ hardware Caulking material Cement Central air-conditioning Cleaning compounds Conduit Doors Ducts Electric wiring, connections, and switching devices Fencing materials Flooring1 Glass Gravel Insulation Lath Lead Lighting fixtures Lime Linoleum1 Revenue[701]Ch 219, p.2 IAC 2/5/25 Lubricants Lumber Macadam Millwork Modular and mobile homes Mortar Oil Paint Paper Piping, valves, and pipe fittings Plaster Plates and rods used to anchor masonry foundations Plumbing supplies Polyethylene covers Power poles, towers, and lines Putty Reinforcing mesh Rock salt Roofing Rope Sand Sheet metal Steel Stone Stucco Tile Wallboard Wall coping Water conditioners Weather stripping Windows Window screens Wire netting and screen Wood preserver 219.3(2) Examples of building equipment. Building equipment includes but is not limited to such items as: Compressors Drill presses Electric generators Forms Hand tools Lathes Replacement parts for equipment Scaffolds Tools Vehicles including grading, lifting and excavating vehicles 219.3(3) Taxability of equipment. Construction equipment purchased by a contractor that is intended for use in the performance of an Iowa construction contract is subject to the Iowa sales or use tax. Equipment that is rented for use on or in connection with an Iowa construction contract would normally be rented subject to tax. Rule 701—219.20(423) provides an explanation of the existing exemption in favor of rented machinery used by a contractor on a job site.