Iowa’s Department of Revenue has reversed its own ruling on a tax collection. At issue are the tags sold to residents in many cities who want something “extra” picked up besides routine garbage collections. They buy a sticker to indicate to the pickup crew that the fee’s been paid, but the revenue department told retailers to charge sales tax on those garbage stickers. Now agency spokeswoman Renee Mulvey says that’s been clarified. A couple months ago they sent a letter to the city of Clinton saying the stickers were taxable, but now an Attorney General’s opinion informs the department that such sales are exempt, as they’d held previously. The stickers, like compost bags, are a way of prepaying local garbage-collection agencies for extra services like picking up extra-large items or yard waste.When a city sells the stickers or bags, they’re exempt, but Revenue works with retailers too, and wanted to be sure it gave them the correct information. This week’s updated ruling has mixed information for clerks and customers. The final word is that retailers who sell stickers won’t collect sales tax on them, though they’ll continue to collect sales tax on compost bags. The state Department of Revenue and Finance had sent the city of Clinton its sales tax memo late in May.
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