Iowa Department of Revenue Proposes New Rule on “Marketable Food Products for Human Consumption”

May 21, 2021

Iowa law provides a limited sales tax exemption for food product manufacturers in Iowa Code 423.3(49). The Iowa Department of Revenue is proposing to adopt a limited definition where “marketable food products for human consumption” only applies to final food products and not food ingredients for purposes of sales tax exemptions. The Department of Revenue states its proposed definition will provide clarity to taxpayers seeking to claim this exemption as manufacturers of marketable food products for human consumption. The Department of Revenue states there is no fiscal impact to the state with this limited definition. However, the rule change would substantially change how food manufacturers in Iowa are currently treated for purposes of sales tax. ABI plans to comment at the May 25 public hearing, which will be hosted via video-conference call from 2-3 p.m. 

Interested members must submit written or oral statements to the Department of Revenue about this proposed rule making by 4:30 p.m. on Tuesday, May 25, 2021. Contact JD Davis for more information.