Marketable Foods for Human Consumption Department of Revenue Administrative Rule Update

ABI, on behalf of members in the food processing business, is working to clarify a proposed Iowa Department of Revenue rulemaking that seeks to describe the application of a sales tax exemption available to producers of marketable foods for human consumption. This law allowing the exemption passed in 1985 and neither the Department nor the legislature have placed these limitations in rule or law. Affected taxpayers believe that the Department’s proposed rule limits the exemption beyond the current practice and would disallow the exemption in some ways that the Department has already allowed in settlement proceedings with affected taxpayers.
ABI staff met with the Department and representatives of the Governor’s office. The parties will now work to introduce legislative language in the 2022 session that reflects the taxpayers’ perspectives of the proper application of the 1985 law. Staff will also be working with the Administrative Rules Review Committee to ensure that their process will allow for consideration of the legislative approach in 2022. If your business uses the marketable foods exemption, we would like to hear from you. Please contact JD Davis.