Sales/Use/Indirect:
Iowa: New Law Exempts Certain Vehicle Leases / Rentals Between Affiliates from Taxation
H.F. 664, signed by gov. 5/17/24. Effective immediately and applicable retroactively to January 1, 2015 for leases or rentals occurring on or after such date, new law generally exempts vehicles leased between affiliates from Iowa’s fee for new registration when the new registration has been paid by the lessor prior to the lease, as well as generally exempts the lease or rental of a vehicle between affiliates from Iowa sales and use tax when Iowa’s sales or use tax or fee for new registration for the vehicle has been paid by the lessor or entity providing the vehicle prior to such lease or rental. Under the new law, an “affiliate” is defined as a lessor or entity providing the motor vehicle for rental that directly or indirectly controls, is controlled with or by, or is under common control with the lessee or renter. The legislation provides that refunds of taxes, interest, or penalties which arise from this bill for vehicle leases or rentals occurring between January 1, 2015, and the bill’s effective date “shall not be allowed, notwithstanding any other provision of the law to the contrary.” Please contact us with any questions.
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